This policy setting allows you to manage whether backups of a machine can run to an optical media or not. If you enable this policy setting machine administrator/backup operator cannot use Windows Server Backup to run backups to an optical media. If you disable or do not configure this policy setting there is no restriction on optical media being backup target.
Disallow optical media as backup target
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HKEY_LOCAL_MACHINE -> Software -> Policies -> Microsoft -> Windows -> Backup -> Server # NoBackupToOptical
Windows Components -> Backup -> Server