Explanation:

Step 1: Encrypt the on-premises VHD by using BitLocker without a TPM. Upload the VM to Azure Storage Step 2: Run the Azure PowerShell command Set-AzureRMVMOSDisk To use an existing disk instead of creating a new disk you can use the Set-AzureRMVMOSDisk command.
Example:
$osDiskName = $vmname+'_osDisk'
$osDiskCaching = 'ReadWrite'
$osDiskVhdUri = "https://$stoname.blob.core.windows.net/vhds/"+$vmname+"_os.vhd"
$vm = Set-AzureRmVMOSDisk -VM $vm -VhdUri $osDiskVhdUri -name $osDiskName -Create Step 3: Run the Azure PowerShell command Set-AzureRmVMDiskEncryptionExtension Use the Set-AzVMDiskEncryptionExtension cmdlet to enable encryption on a running IaaS virtual machine in Azure.
Incorrect:
Not TPM: BitLocker can work with or without a TPM. A TPM is a tamper resistant security chip on the system board that will hold the keys for encryption and check the integrity of the boot sequence and allows the most secure BitLocker implementation. A VM does not have a TPM.
References:
https://www.itprotoday.com/iaaspaas/use-existing-vhd-azurerm-vm