Hello there,
Can you try changing the profile location to something locally and see if it will create a new VHD in your new location?
Try testing to see if your account has permissions to the profile path by navigating to your storage account's path using the UNC
Navigate to the storage account in azure portal. under access control (IAM), check access to your Azure AD user/group. make sure that user or group has "Storage File Data SMB Share Contributor" access.
Similar discussion here https://techcommunity.microsoft.com/t5/azure-virtual-desktop/outlook-login-issues-with-wvd-fslogix/m-p/1024998
Hope this resolves your Query !!
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