One of nicest hidden gems in Windows 7 is exFAT. It's a simple file system with support for huge files (16 EB) but without any support for access control. Pretty straightforward replacement for FAT32.
As leap of faith action I decided to format one whole disk with it. It was disk that kept my multimedia files and occasional virtual disk. I wasn't troubled by security since BitLocker works like a charm even inside of VHD. Unfortunately that plan was snipped in the bud.
As soon as I created virtual disk I was greeted with "The requested operation cannot be completed due to file system limitation". Even worse, you cannot attach already existing VHD that happens to be there. It simply refuses to do anything.
While I haven't done any detailed analysis, it seems that exFAT and VHD do not work together.
8 years later I have the same problem lol
This file system is created and later thrown into garbage bin by Microsoft. To my knowledge, it was created in 2006 primarily for USB sticks but and only a few media devices support it. If you want the limit the use of this file system, why do you create it at all? It is a shame and disingenuousness deeply manifested by Microsoft.
2 Years more and I just found this issue as well
11 years, and it’s still broken.
Windows 11 now support VHD(X) on exFAT