Some Windows Server 2008 machines running the ShadowSnap client could receive a format disk popup when the Datto appliance starts the backup process.
That format error it is actually a Windows bug that happens because of the ISCSI service because the agents are encrypted.
Unfortunately on Windows Server 2008 machines without R2 there’s no solution to resolve the issue. But in servers with Windows Server 2008 R2 the issue could be resolved by installing Service Pack 1.
However, the message should not affect the machine in any way and can be discard just hitting on Cancel. Attached there's the Datto’s knowledge database article with more information about it.