Hi,
I just tried to update my existing Windows 11 arm VM to the new encryption scheme, but after it's done an "Internal Error" occurs. The message is something like "the machine got encrypted successfully, but after that an internal error occured". After that it's impossible to start up the machine, even after restarting Fusion or the host machine (M1 Pro MacBook Pro). Keeping the old encryption scheme works fine with all new feature like hardware acceleration and vmware-tools.
Best,
Brian