@nithya swaminathan
Thank you for your patience! If you're attaching an encrypted data disk to an unencrypted VM, you can try to set the same encryption settings on the second VM as you did the original VM.
For example A backup is recommended prior to performing any encryption steps on your VM.
VM1:
az vm encryption enable --resource-group "VM1-RG" --name "VM-1" --disk-encryption-keyvault "ADEvault" --volume-type "All"
VM2:
az vm encryption enable --resource-group "VM2-RG" --name "VM-2" --disk-encryption-keyvault "ADEvault" --volume-type "All"
Note:
Our Linux AD SMEs let us know that you might run into issues when doing this since this process for Linux VMs is not supported. However, if you have a backup you should be able to revert back to the last known "good" state.
If you have any other questions, please let me know.
Thank you!