Virtual Machines -> Disks tab -> Encryption to include managed Disks' Server-side encryption using customer-managed keys in Azure Key Vault
When we encrypt Azure managed disks with customer-managed keys in Azure Key Vault , we can see the disk with "EncryptionAtRestWithCustomerKey" in "Export template" of the Disk.
However, when we see the same disk in the Virtual Machine, it says "Encryption: Not enabled". Because this encryption status is for Azure Disk Encryption (ADE). We would like to request a feature to include managed Disks' Server-side encryption using customer-managed keys in Azure Key Vault in Virtual Machines -> Disks tab encryption status.
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Let me explain why we need this.
Azure Disk Encryption  is happening at the VM's OS level encryption either by BitLocker for Windows or DM-Crypt in Linux. Depends on the choices of Linux flavors, DM-Crypt might not run for the OS and/or Data disks. In our situation, we need to run old Linux distro which DM-Crypt can't support it. Therefore we need data at rest encryption at block storage level not at the OS level.
Managed Disks have been encrypted with platform keys for a while. But we need to use customer-managed keys from Key Vault because we need to cryptographic erase capability. So, we encrypt the Managed Disks with customer-managed keys .
With current situation, even we are encrypted at rest, our compliance audit fails because the encryption status says "Encryption Not Enabled".
If you allow Managed Disk Encryption with Customer-managed keys as valid encryption enabled status in Virtual Machines' Disk section, not only the current ADE, that would be great.
 Azure Disk Encryption for virtual machines and virtual machine scale sets
 Server side encryption of Azure managed disks