Troubleshooting LDT Encryption Failures
If you use Windows quotas, which allow you to limit the amount of storage space a user account can use on a drive, you may not be allowing enough space for LDT. LDT uses an extra 4K per file for an LDT policy. If the extra space is not considered, and the space permitted by quotas is exceeded in a directory, then LDT may not be able to transform files or rekey those files later.
LDT also requires space for temporary recovery metadata that exists during transform or rekey of a file. If the file metadata exists, but the recovery metadata cannot be created and written to, then rekey of that file fails.
So make sure to allocate enough space for LDT transformation, rekeying, and recovery of metadata when setting quotas.