Hello Chin. Hope you are doing good.
The ‘Restore disks’ option available in Azure Recovery Services Vault currently supports restoring disks only to a storage account. And there are other conditions like the storage account must be non-ZRS and shouldn’t be part of any affinity group etc. This is the same even if we try to restore VMs with managed disks. But with managed disks, there is no concept of storage accounts. The backed up disks are restored into a non-ZRS storage account which is part of unmanaged disks. Hence when we create a new restored VM using this unmanaged disks and attach it to an Aligned (Managed) Availability Set, the above mentioned error will be thrown. So restoring managed disk VMs into another managed disk isn’t supported as of now.
One other option I would suggest is you can take frequent snapshots of your Managed Disks and restore them. But then there is another concern here. If you are using multiple disks that are striped then this method would become a flop.