This article provides steps to resolve the error:

Failed to launch virtual machine. Azure error code: RequestDisallowedByPolicy

which occurs when deploying or starting a virtual machine. This policy error prevents the instance from launching. In production, there will be more information included with the error log, including the name of the policy.

1. Review the error message. It includes details of the policy assignment and policy definition causing the restriction, and locate the policy name.
2. Check the implemented policy in your Azure environment that is blocking the deployment. The error typically means a policy is restricting VM types or sizes.
3. Identify what in the policy is disallowing the resource and adjust the configuration to comply with allowed settings or update the policy as needed through your organization's Azure governance process.
4. For more details and troubleshooting steps, refer to: Azure troubleshooting guide: RequestDisallowedByPolicy.