You cannot encrypt an unencrypted source VM in an active replication

If you try to encrypt an unencrypted virtual machine in an active replication configuration, the encryption fails.

Problem

You must recover the unencrypted virtual machine and configure a new replication with encrypted seed disks.

Solution

1. Recover the VM on the remote site, but do not power the VM on.
2. Remove the replication of the source VM.
3. Edit the settings of the VM on the target site and change the VM storage policy to VM Encryption Policy.
4. Edit the settings of the source VM on the source site and change the VM storage policy to VM Encryption Policy.
5. Unregister the recovered virtual machine on the target site, but do not delete the disks.
6. Configure a new replication and select the disks of the recovered VM on the target site as seeds.