Hi,
The error message "An internal error occurred" doesn't give much of a clue.
Run services.msc to open Services and restart the Virtual Machine Management Service (VMMS) manually to see if the problem persists. Open Event Viewer and check for related errors in the VMMS log under Applications and Services Logs \ Microsoft \ Windows \ Hyper-V-VMMS.
Backup all the .vhd/.vhdx/.avhd/.avhdx virtual disk files first and create a new VM to see if the same issue happens when merging disk files of that.
Also try System File Checker to repair corrupted system files on your computer. Open CMD as administrator and run
DISM.exe /Online /Cleanup-image /Restorehealth
SFC /scannow
Best Regards,
Ian Xue
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