Hi Mahadev, Rakesh [HAEA]
Welcome to the Microsoft Q&A Platform! Thank you for asking your question here
Based on your query,
General things happen If disk encryption isn’t turned on, someone could access your sensitive data if they steal the physical disks or hack the underlying hardware. This is a big risk, especially for personal or financial data, and could lead to legal issues
To enable encryption at host for your virtual machines and virtual machine scale sets, navigate to the Azure portal, select your virtual machine or scale set, and go to the "Disks" section. Under "Encryption", set "Encryption at host" to "Enabled" and save your changes.
For Windows virtual machines, you can enable Azure Disk Encryption or EncryptionAtHost by navigating to your Windows virtual machine in the Azure portal, selecting "Disks", and setting "Azure Disk Encryption" to "Enabled". Again, save your changes to apply the settings.
For further detailed guidance, please refer to the following Microsoft documentation:
Use the Azure portal to enable end-to-end encryption using encryption at host
Azure Disk Encryption for Windows VMs
And also, can you look into the same kind of similar question to get more about the details
https://learn.microsoft.com/en-us/answers/questions/245460/what-are-the-cons-of-azure-disk-encryption
https://learn.microsoft.com/en-us/answers/questions/1287847/encryption-at-host-potential-downsides
if you have any further queries. If you need any additional assistance, please feel free to tag me in a comment, and I will be happy to help you as needed.
If you found this information helpful and my inputs, please click an accepting the answer and "Upvote" on my post for other community members reference