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Can it cause issues if mounted Veracrypt volume's size bigger than free space in OS drive?

No.1517872 View ViewReplyOriginalReport
When Veracrypt opens / mounts encrypted Volume. If Volume's size higher than free space on C drive, can it cause issues? Let's say volume's size is 500GB , C drive (OS) has 300GB free space. Can it cause any issues?

And how mounting volume (encrypted or not) works?