We do not have sufficient capacity for the requested VM size in this zone.
This was the issue I faced last time I updated the OS Disk of a VM in Azure. The error itself didn’t have to do anything with the Disk size or updates to it but the capacity of the Zone (availability) where it was being allocated. This was a non-critical VM in hub.
Next, I thought of using another series of VM with same size 4 vCPUs 8 GB RAM, updated the size and clicked Start. Once again, the same Error. I did some searching for the issue and found a reddit article that it’s Microsoft’s Datacenter issue and should resolve soon and we should try to allocate or start the VM in few minutes or an hour. I waited of 5 mins or so and tried to allocate the VM again it didn’t work.
Now, based on the usage of VM, I chose a size with fewer number of CPUs, saved it and hit Start. It worked. End of the story :).