@Sumit Kumar Mishra, Thanks for posting in Q&A.
Windows 365 Cloud PC disks are encrypted with Azure Storage server-side encryption (SSE). This storage layer encryption provides automatic encryption of data at rest on your Microsoft-hosted Cloud PC's disk. The encryption is transparently applied using 256-bit Advanced Encryption Standard (AES) encryption, a modern block cipher, and is FIPS 140-2 compliant. The encryption is applied to every Cloud PC in every region at no extra cost. Disks, snapshots, and images are automatically encrypted-at-rest with platform-managed keys.
https://learn.microsoft.com/en-us/windows-365/enterprise/encryption#data-encryption-in-windows-365
Windows 365 as a service treats all data stored on Windows 365 disks as customer content. For command "manage-bde -status", it provide information that all drives on the computer; whether or not they are BitLocker-protected. But as BitLocker is not supported as an encryption option for Windows 365 Cloud PCs. . So we see the disk is fully decrypted.
https://learn.microsoft.com/en-us/windows-server/administration/windows-commands/manage-bde-status
Hope the above information can help.
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