At one of my costumer Azure Subscription, I was adding a new virtual machine to the existing Azure Recovery Vault previously configured, when I run into this error:
I found very odd, why this message appears. So, I start to review the Recovery Vault configuration and I realize this Recovery Vault only had one backup policy. Then I start to investigate if this was a soft limit or hard limit on Azure. I found this article https://docs.microsoft.com/en-us/azure/backup/backup-azure-vm-backup-faq#is-there-a-limit-on-number-of-vms-that-can-beassociated-with-a-same-backup-policy
After a few moments I realize this is a limitation of Azure. Then I start to work on the resolution. In this case, was a very simple resolution. Just create a new backup policy, and then you have another 100 more VMs to assign to that backup policy.