Having the paging file on the C drive is not necessarily a problem, but it may not be the most optimal configuration for your Azure Virtual Machine. The primary reason for placing the paging file on the temporary drive (D drive) is that the temporary drive typically provides better performance compared to the OS drive.
The temporary drive is backed by local SSD storage and is designed for low-latency and high-throughput IO operations. Placing the paging file on the temporary drive can improve the performance of the VM, particularly when it comes to disk-intensive workloads or when the VM is under memory pressure.
However, if your VM is not experiencing any performance issues and you do not want to take the VM down for reconfiguration, you can continue to use the paging file on the C drive. It is essential, though, to monitor the performance of the VM and ensure that the current configuration does not lead to any bottlenecks or issues.
If you later decide to move the paging file to the temporary drive, you can do so by changing the virtual memory settings in the VM's operating system, without the need for redeployment. Keep in mind that moving the paging file may require a reboot of the VM, which will result in a brief downtime.