Q. Is ReFS does not zero blocks allocated to VHD files how is existing data on disk protected?
A. When a fixed size VHD is created on NTFS or if a VHD file is extended on NTFS the blocks allocated are zeroed as allocated to avoid old data on the clusters allocated to the VHD being read. With ReFS this zeroing does not occur which results in faster VHD creation and extensions but does this mean existing data on disk could be read? No. The protection of existing data on disk is ensured through the ReFS metadata. With ReFS data cannot be read from non-initialized (i.e. never written) clusters even if pre-allocated, or more simply if it has not written to the cluster it can't read from it thereby protecting any existing data on disk.