So I continued the troubleshooting process by testing out multiple scenarios and I think I managed to crack the case a bit. The problem with the snapshot button not working in policies occurs when NBU is set to run under a domain service account. When NBU is set to run under "Local System" account the snapshot button works properly although I haven't yet tested if Exchange would be backed up this way.
So I was wondering if anything may have changed around the required permissions for service accounts with NBU 8.3. Prior the upgrade my service account was set with the following "User Rights Assignments" on the NBU master server:
- Act as part of the operating system
- Back up files and directories
- Create a token object
- Log on as a service
- Manage auditing and security log
- Replace a process level token
- Restore files and directories
Also the service account is a member of the server's Local Administrators group.
Let me know if perhaps I'm missing any additional permissions that might be mandatory.