Decided to show how I use differencing disks, and how I benefit from them. Apparently, as your edits show, you already found answers to your questions, but maybe this helps other members to understand the concept.
Some facts first. Differencing disks means that a VM uses a so called child VHD for an existing parent VHD. The parent VHD remains intact, in fact it can even be write protected. All changes made to VM are saved to child VHD. In some sense you could call it "
checkpoint on steroids"; create a new VM using a child VHD, test your stuff, when done delete the VM and its child VHD to undo changes. Parent VHD is still there, repeat the process to test something else.
A differencing disk is always dynamically expanding, it can't be created as fixed size VHD. It's maximum size cannot be set by user, it can expand endlessly until the drive where it is stored has no more free space for it to expand.
One reason I use differencing disks is to save storage space on my dedicated Hyper-V partition. I use it mainly for two slightly different scenarios. Another good reason is how fast it is to create new virtual machines.
Scenario 1: Different W10 versions
I installed
Windows 10 version 1803 on a Hyper-V VM, When done, I simply deleted the VM, leaving only its VHDX file on my Hyper-V VM partition. I renamed that VHDX file as
W10 1803 Base.
Next, I created three differencing virtual hard disks, naming them
W10 Insider Preview Fast,
W10 Insider Preview Skippy, and
W10 version 1803. All three are using the same base, parent VHD
W10 1803 Base.
In Hyper-V Manager I then created three new virtual machines, each of them using one of those three child disks. Booted up VM
W10 Insider Preview Fast and upgraded it to latest Fast Ring build, booted up VM
W10 Insider Preview Skippy and upgraded it to latest Skip Ahead build, and booted up VM
W10 version 1803 and have been updating it with all cumulative and other updates for last official release. In a month to six weeks, when version 1809 will be released, that last mentioned VM will be upgraded and renamed to
W10 version 1809.
(Click to enlarge.)
Scenario 2: Different domain controllers
I have a clean installed Windows Server 2016 and use its VHDX file as parent disk. I have created three differencing disks and use them for virtual machines for two different Server 2016 local domains / domain controllers, and use third one which I upgraded to Server 2019 Preview, using it for third local domain.
Much faster to setup than to install server OS three times, a lot of HDD space saved.
How do I save space? Let's say that I had those three virtual machines mentioned in
Scenario 1 above done traditionally using normal dynamically expanding virtual hard disks. The size of their VHDX files would be at the moment, depending on how many upgrades the public release, Fast Ring and Skippy virtual machines would have gone through around 25 to 30 GB each.
Using one parent VHD, it's size always remains at around 10 GB. It will not be changed, updated or upgraded, nothing will be saved on it. All three child VHDs, when VMs using them have been created only use 4 MB to start with. Of course these files will grow, my version 1803 VM child disk is now over 12 GB (it started its life as version 1709, was later upgraded to 1803), both Fast and Skippy already have over 15 GB child disks as they have been through a few upgrades.
All together, my parent (base) disk plus all three child disks, the VHDX files, use currently a total of 53 GB of storage space. Having done the same three virtual machines using normal dynamically expanding virtual hard disks, they would at the moment consume at least 80 GB of HDD space.
That's one way to use differencing disks.
Kari