Veeam B&R - Hot Add Is Not Supported For This Disk

When backing up a VM using Veeam Backup and Replication, I kept seeing the message;

Hot add is not supported for this disk, failing over to network mode...

This was occurring because the LUN that my Veeam proxy server was running on was formatted in VMFS-3, whilst the server I was trying to back up was on a LUN running VMFS-5 and had a different block size.

After upgrading the proxy LUN to VMFS-5, disks began hot-adding successfully.