Two issues here. Azure doesn't support in place upgrades from Windows 10 to Windows 11.
Also, direct migration from Gen1 VM to Gen2 VM is not supported.
- Can I migrate a VM from Generation 1 to Generation 2? No, you can't change the generation of a VM after you create it. If you need to switch between VM generations, create a new VM of a different generation.
The recommended method is to create a new Gen 2 VM and migrate your data.
However, it is possible using the workaround. Download the VHD into Hyper-V on your device and do the upgrade then reupload it back. You can also change from Gen 1 to Gen 2 during this process.
Hope this helps! Let me know if you still have questions or need further assistance.
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