@NeilGrevitt Whilst migrating my other backups to NFS, I noticed that one of the VM backups is able to perform file restores successfully.

The successful VM is Ubuntu 22.04.1 LTS, but has been upgraded multiple times and was originally a flavour of 18.x LTS somewhere along it's life.

The unsuccessful VM is Ubuntu 20.04.5 LTS that I believe was installed at this version.

The only difference I can see is the output of lvscan, which does point to an issue with LVM!

Successful VM:
:~$ sudo lvscan
:~$

Unsuccesful VM:

:~$ sudo lvscan
ACTIVE '/dev/ubuntu-vg/ubuntu-lv' [<19.00 GiB] inherit

Not sure where to go now but thought it worth reporting!

Thanks all for your comments. I've managed to overcome the NFS errors listed, by using the new "multiple data blocks" setting! So for me, looks like backing up to .vhd won't work on either SMB or NFS.