Challenge
Windows File Level Restore hangs on "Starting restore session" for abnormally long period of time while free disk space on drive C:\ keeps decreasing dramatically.
You may find following path with cache file constantly growing:
C:\Windows\system32\config\systemprofile\AppData\Local\mount_cache{GUID} or C:\Windows\SysWOW64\config\systemprofile\AppData\Local\mount_cache{GUID}.
Cause
The issue occurs when guest Windows has Transactional NTFS (TxF) turned on. When mounting to Veeam server it can cause NTFS driver to enter infinite loop trying to re-apply transaction log.
Solution
To resolve:
1. Login to guest OS as administrator. Run cmd with elevated privileges. Execute 2 following commands for each logical disk in VM. Example for disk C:
fsutil resource setautoreset true C:\
fsutil resource setavailable C:\
2. Make a new backup point of that VM. verify that File Level Restore starts fine from new backup point
More Information
https://msdn.microsoft.com/ru-ru/library/windows/desktop/bb968806(v=vs.85).aspx