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With Vembu VMBackup Free Edition, you can create one full-featured backup job with up to 3 VMs in it. For rest of the backup jobs, it will be of limited feature type and you can configure backup for any number of VMs.

We noticed your current backup job was of limited feature type.

Either you have selected limited feature version while configuring the backup job or you had converted your backup server to free edition after configuring the backups. If you had converted your backup server to free edition after configuring the backups, then by default all the older backup jobs will be of limited feature type.

For the VMs configured under limited feature version, CBT enabled incremental backups and retention policies are not applicable.

So to enable full-featured backups for your Hyper-V VMs, delete the older backup job and configure a new backup job for 3 of your Hyper-V VMs by selecting Full Featured version (You will be asked to choose full featured version or the limited feature version while configuring the backup job).