A commonly overlooked task in the snapshot procedure is the merging process after deleting an older point-in-time snapshot. By selecting the previous point-in-time snapshot and selecting Delete, the virtual machine continues without interruption.

At the file level, however, that .AVHD file still exists in the snapshots folder and will continue to grow. To return to your original VHD file, shut down the guest. At this point, the .AVHD file will merge into the VHD file and be deleted automatically. Depending on the size of the .AVHD this can take some time so you will need to do this at an appropriate time.