A backup fails with the error "The specified volume is nested too deeply to participate in the VSS operation. (0x8004232c)".
This will be seen on a VM host if the volume it is attempting to backup is available on the host as well as on the the VM, for example:
- on attempting to create a shadow copy of a volume that resides on a VHD that is contained in another VHD; or
- on attempting to create a shadow copy of a VHD volume when the volume that contains the VHD is also in the same shadow copy set.
These scenarios mean the volume is "nested" too deeply to participate in the VSS operation, resulting in a logic failure between the host VSS writers and VM VSS writers.
To resolve this, check all drive volumes on the host machine and make sure none are mapped drives or VHDs assigned to VMs.