When prompted with this error as shown below, it could mean different things.

In my case, the WDS service were not running. a simple restart of the service solved the issue.

When prompted with this error as shown below, kindly follow the possible solutions to have this resolved.

Found this workaround
– From the VM itself, you can shutdown the VM or
– Use the turn off the feature in hyper-v works.

When prompted with this error “The Virtual Machine Management service encountered an error while configuring the hard disk on a virtual machine”

Solution: This is because the system failed to create a new hard disk file of the same name on the same path.
– Locate where the VHDX files are stored and deleted them.
– And then try to create a new Virtual Machine (VM).