How to fix error The Group Policy settings for BitLocker startup options are in conflict and cannot be applied

ERROR: An error occurred (code 0x8031005b): The Group Policy settings for BitLocker startup options are in conflict and cannot be applied. Contact your system administrator for more information.

I got this error when I attempted to encrypt a virtual hard drive (.vhd) that I created as a backup disk.

Platform: Microsoft Windows [Version 10.0.19043.1348]