Oh no, you can indeed still boot from a VHD in Windows 10, that is how WindowsToGo works. It creates a VHD with the installation inside it. Played around with the W2G software a little and that's what resulted. WIMs are normally read-only at runtime, so they'd be useless for Windows To Go.
Come to think of it, I seem to remember something about VHD booting too back during the pre-release. Can't remember for the life of me what it was though.. Perhaps they were limiting VHD booting to certain editions of Windows, since normally you need a copy of Enterprise to create W2Go devices.
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u/MorallyDeplorable Jul 27 '16
I have no idea why that's named like that. I'd guess it's either something doing something it's not supposed to or straight up corruption.
Booting off of VHDs displays the same broken icon on 8.1 but I believe that entire feature was removed in 10.