For a few years my primary development machine has actually been a VM with source located on a physical hard drive attached to the VM. This helps reduce latency compared to a differencing disk (AVHD) which may need to expand to accommodate additional data (common when building).
A while back I explained how Windows Installer sets the TARGETDIR property to the root of the fixed drive with the most free space available. The problem is that even an attached USB external drive can appear as a fixed drive,
Testing software can be fun and rewarding. You get to see new, upcoming features and provide valuable feedback to the developer. But as with most pre-release software, we recommend that you don’t install it on production machines. You could dedicate extra machines for testing,