@Apurva Pathak When you perform a backup of an Azure VM, there are two types of backups that can be performed: application-consistent backups and file system-consistent backups.
Application-consistent backups use the Volume Shadow Copy Service (VSS) to ensure that all data in memory and on disk is in a consistent state at the time of the backup. This is important for applications that have databases or other data that is constantly changing.
File system-consistent backups, on the other hand, do not use VSS and only ensure that the file system is in a consistent state at the time of the backup. This type of backup is typically used for file servers or other systems that do not have databases or other applications that require application-consistent backups.
If the response helped, do "Accept Answer" and up-vote it