If you are getting the “Virtual Disk Service error: The service failed to initialize” error, it might be because the Virtual Disk Service is not running. To fix this, you need to start the VDS ...

Fix Virtual Disk Service error Delete is not allowed on the current boot, system, pagefile, crashdump or hibernation volume on Windows 11/10.

If you see Disk Management could not start Virtual Disk Service & Disk Management is stuck at or not connecting to VDS, see this post.