Hello @Charalampos Sarantoglou ,
Thank you for update, in addition to what @Anonymous and @Manu Philip suggested I would like to explain what has caused this issue and posting the possible resolutions to this issue.
Backup service creates a separate resource group than the resource group of the VM to store restore point collection. The naming format of the resource group created by Backup service is: AzureBackupRG_<Geo>_<number>. For example: AzureBackupRG_westeurope_1
If you remove backups from recovery service vault, it will delete all the restore points that are in vault and the restore points collection set has separate local snapshots(for instant restore) that are collected in the AzureBackupRG_westeurope_1 and are in hidden items as shown below.
Symptoms: 404 "Resource not found" error when I try to delete teh resource
Cause: You have removed this RG without deleting the restore point collection set that left stale entries of the restore points. This happens when there is a delay from the backend otherwise it shouldn't end up in this situation usually.
Solution:
You can recreate the RG and remove the restore point collection from hidden items like you did using PS
Remove-AzResource -ResourceGroupName AzureBackupRG_westeurope_1 -name AzureBackup_NW-RHEL01_1847038797884137554 -Force -ResourceType Microsoft.Compute/restorePointCollections
--please don't forget to upvote and Accept as answer if the reply is helpful--