The issue surfaced when I attempted to use 7za to provide a VM backup solution on ESXi platform. If the VM is powered off I am able to zip the VM directory as well as all related files; but for powered ON VMs given the vmdk file is locked by hypervisor, the only solution is to first create a snapshot file and then zip up the unlocked VMDK file. Suprisigly 9.20 fails if compression option is mx=1, it fails with error E_FAIL. With no-compression operation selected the operation is a success.
The submitted patch replaces the system call for "file operation" to use C library file operation calls, that works fine. It is tested against VM of sizes as big as 100G and it works fine.