... to just specify the 2 drives that you want to backup then & forget the SCC altogether or switch off multi-streaming in this instance.
If it's an ALL_LOCAL_DRIVES directive that is being used then presumably it kicks off each separate job (multistream being set), SCC, C:\ etc before it looks at the exclude lists. So it's still trying to start the SCC backup before trying to exclude it. The fact that there's a possible VSS issue is just confusing the matter.
What would NB do if you had the policy set up the same but tried to exclude the C:\ drive, would it still try to kick it off before reading the exclude & produce a status 0 'empty' backup? I don't know, it's not something I've ever considered doing!