Upgrading to Windows 11 with (pre)existing VeraCrypt system encryption

I've tried upgrading a laptop to Windows 11, with an existing VeraCrypt system encryption. I decrypted the partition and removed the system encryption first, then tried the update. It always failed with error 0xc190012e. I couldn't find any details about that error code, or helpful advice. I've tried a bunch of generic stuff (upgrading via either Windows Update or Windows Update Assistant, chkdsk, sfc /scannow, safe mode with networking, and probably some more), but none of these resolved the issue.

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tldr: Delete or rename C:\Users\Default\AppData\Local\Microsoft\Windows\WSUS\SetupConfig.ini after removing the system encryption.

A few more words about this:

There’s a file C:\Users\Default\AppData\Local\Microsoft\Windows\WSUS\SetupConfig.ini (documentation) which VeraCrypt creates when encrypting the system partition, with the following content (for me at least):

[SetupConfig]
ReflectDrivers="C:\Program Files\VeraCrypt"
PostOOBE=C:\ProgramData\VeraCrypt\SetupComplete.cmd

After removing system encryption, the file only contains

[SetupConfig]

but still exists.

Removing or renaming this file allowed me to upgrade and re-enable system encryption without further problems. I’ve tried it on another (desktop) machine to verify - ran into the exact same problem, which went away after removing that file.

Edit: I’ve opened a bug report at VeraCrypt’s repo.

Article Link: Upgrading to Windows 11 with (pre)existing VeraCrypt system encryption – nullteilerfrei