An Image for Windows backup using VSS fails when backing up one or more partitions on a drive that includes a partition encrypted with BitLocker. The Windows Event Log shows an event ID 4001 error for VSS. Image for Windows reverts to using PHYLock, which will back up BitLocker partitions in their encrypted state instead of backing up only used space.
The partitions being backed up lack sufficient free space to create the shadow copies. Free space on the BitLocker partition(s) is not used for unencrypted partitions.
This issue can occur when backing up a normal Windows drive (or unencrypted partitions on the drive) where Windows is BitLocker encrypted. For example, if the drive consists of an EFI System partition, a Recovery (WinRE) partition, and the Windows partition (encrypted), the backup will fail if the Recovery partition doesn't have enough free space available.
Sufficient free space must exist on an NTFS partition that is not encrypted (in the example above, the Recovery partition is the only unencrypted NTFS partition). The free space amount specified as needed is at least 320MB per volume. However, in cases such as the scenario here, having even 35-50MB available may be enough. Obtaining more free space on the Recovery partition may not be possible (the winre.wim file may almost completely fill it). Instead, it may be necessary to resize the partition larger or create a new unencrypted NTFS partition on the drive.
Otherwise, if an entire disk image backup using VSS isn't required, PHYLock can be used to back up the unencrypted partitions and VSS used to create a separate backup of the BitLocker partition(s).