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There is no direct way/the Microsoft team can do this. You need to unprotect the VM from the vault and then re-protect it. This is because enhanced backup policies provide additional features and functionality not available in standard backup policies.
Steps to follow: First, you must disable the Soft Delete
In your Backup Item, proceed to stop the backup
You must choose Delete backup data
Once this is done, you will be able to enable a standard backup policy for your VM.
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