I’ve seen this exact problem with Windows Server 2022 specifically, and it isn’t Azure Migrate itself.
Server 2022 on VMware often boots with LSI Logic SAS or E1000/E1000E, but Azure Local does not support those drivers once the VM is converted.
When the OS loads and cannot find the expected storage or NIC driver, it throws PAGE_FAULT_IN_NONPAGED_AREA or SYSTEM_THREAD_EXCEPTION_NOT_HANDLED on boot.
What fixed it for me:
Switch the SCSI controller in VMware to VMware Paravirtual (PVSCSI) before running the migration. Server 2022 requires the correct storage driver during the image conversion.
Change the NIC type to VMXNET3, then reinstall VMware Tools so the correct drivers load.
Shut down, prepare again (static IP script + diskpart OnlineAll), then re-run the migration.
Once I switched the storage and NIC controller types, the Server 2022 VM booted normally in Azure Local with no BSOD.
Windows Server 2016 and 2019 work with LSI Logic SAS more often, but Server 2022 is much stricter with driver compatibility during Azure Local conversions.