Snapshotting of VMs with Persistent vTPM is not yet supported (targeted 4.16?)
The error message when you try to snapshot it anyway is somewhat confusing and could be improved.

OpenShift 4.14.1
Virtualization 4.14.0

Always

1. Create VM with persistent vTPM
2. Attempt to snapshot using console UI
3.

1. Name field is changed with a new adjective-animal combination.
e.g. snapshotting VM called win11-colossal-swordfish ends up with a snapshot name field filled in as snapshot-selective-bonobo

2. Error in modal says:

An error occurred
Error "VirtualMachine "win11-colossal-swordfish" needs backend storage, which is not yet supported" for field "spec.source.name".

This seems to imply the problem is with the name of the snapshot, and only hints at backend storage (which doesn't automatically imply vTPM persistent storage.

For example, the naming for the vTPM PVC is persistent-state-for-win11-colossal-swordfish which implies the term for the storage should be persistent state

Until the snapshot feature is added, the Snapshots tab should probably prevent the user from attempting to take a snapshot, with an explanation that it is unsupported. Take snapshot should be greyed out and nonfunctional.