When creating or updating MCS catalog the following error is generated no matter how long the timeout is set for.

Error Id: XDDS:7BE07C6A

Exception:
Citrix.Console.Models.Exceptions.ProvisioningTaskException Preparation of the Master VM Image failed. Make sure the selected image has a supported OS (for example, Windows 7) and the correct version of the VDA (7.0 or later) installed.
at Citrix.Console.PowerShellSdk.ProvisioningSchemeService.BackgroundTasks.ProvisioningSchemeTask.CheckForTerminatingError(SdkProvisioningSchemeAction sdkProvisioningSchemeAction)
at Citrix.Console.PowerShellSdk.ProvisioningSchemeService.BackgroundTasks.ProvisioningSchemeTask.WaitForProvisioningSchemeActionCompletion(Guid taskId, Action`1 actionResultsObtained)
at Citrix.Console.PowerShellSdk.ProvisioningSchemeService.BackgroundTasks.ProvisioningSchemeCreationTask.StartProvisioningAction()
at Citrix.Console.PowerShellSdk.ProvisioningSchemeService.BackgroundTasks.ProvisioningSchemeCreationTask.RunTask()
at Citrix.Console.PowerShellSdk.BackgroundTaskService.BackgroundTask.Task.Run()

DesktopStudio_ErrorId : ProvisioningTaskError
ErrorCategory : NotSpecified
ErrorID : ImagePreparationFinalizationFailedCompletely
TaskErrorInformation : Terminated
InternalErrorMessage : No Image Preparation results found. There may be no suitable VDA installed, or some other serious failure in the Master VM. Image preparation failed.
DesktopStudio_PowerShellHistory : Create Machine Catalog 'CATALOG'
25/03/2019 5:25:09 PM

Get-LogSite -AdminAddress "dc2.domain.com:80"
Start-LogHighLevelOperation -AdminAddress "dc2.domain.com:80" -Source "Studio" -StartTime "25/03/2019 6:04:12 AM" -Text "Create Machine Catalog `'CATALOG`'"
New-BrokerCatalog -AdminAddress "dc2.domain.com:80" -AllocationType "Random" -IsRemotePC $False -LoggingId "eebcd767-d128-45c3-8116-b57577cc2ff8" -MinimumFunctionalLevel "L7_9" -Name "CATALOG" -PersistUserChanges "Discard" -ProvisioningType "MCS" -Scope @() -SessionSupport "MultiSession" -ZoneUid "1cb5addb-6a95-41ee-932a-344f45825a4e"
New-AcctIdentityPool -AdminAddress "dc2.domain.com:80" -AllowUnicode -Domain "domain.com" -IdentityPoolName "CATALOG" -LoggingId "eebcd767-d128-45c3-8116-b57577cc2ff8" -NamingScheme "PDCCTX2#" -NamingSchemeType "Numeric" -OU "OU=PROD,OU=XenApp,DC=domain,DC=com" -Scope @()
Set-BrokerCatalogMetadata -AdminAddress "dc2.domain.com:80" -CatalogId 14 -LoggingId "eebcd767-d128-45c3-8116-b57577cc2ff8" -Name "Citrix_DesktopStudio_IdentityPoolUid" -Value "3f0bae05-b6b7-430c-98ca-686a1d05bb7c"
Test-ProvSchemeNameAvailable -AdminAddress "dc1.domain.com:80" -ProvisioningSchemeName @("CATALOG")
New-ProvScheme -AdminAddress "dc1.domain.com:80" -CleanOnBoot -CustomProperties "<CustomProperties xmlns=`"http://schemas.citrix.com/2014/xd/machinecreation`" xmlns:xsi=`"http://www.w3.org/2001/XMLSchema-instance`"><Property xsi:type=`"StringProperty`" Name=`"UseManagedDisks`" Value=`"true`" /></CustomProperties>" -HostingUnitName "CTXMCS" -IdentityPoolName "CATALOG" -InitialBatchSizeHint 2 -LoggingId "eebcd767-d128-45c3-8116-b57577cc2ff8" -MasterImageVM "XDHyp:\HostingUnits\CTXMCS\XENAPPGM.vm\20190325 No SEP.snapshot" -NetworkMapping @{"0"="XDHyp:\HostingUnits\CTXMCS\\Server_VLAN_10.network"} -ProvisioningSchemeName "CATALOG" -RunAsynchronously -Scope @() -UseWriteBackCache -VMCpuCount 2 -VMMemoryMB 16384 -WriteBackCacheDiskSize 60 -WriteBackCacheMemorySize 2048
Stop-LogHighLevelOperation -AdminAddress "dc2.domain.com:80" -EndTime "25/03/2019 6:25:09 AM" -HighLevelOperationId "eebcd767-d128-45c3-8116-b57577cc2ff8" -IsSuccessful $False

Disabling the image preparation phase from the delivery controller allows the process to complete:

Set-ProvServiceConfigurationData -Name ImageManagementPrep_DoImagePreparation -Value $false

Ensure the san policy=OnlineAll is set as per https://support.citrix.com/article/CTX202229

Uninstall the Virtual Delivery Agent if it was installed from the command line, then reinstall manually by right clicking on VDAServerSetup_7_15_3000.exe and selecting Run as administrator from the context menu.

Ensure that the "Machine Identity Service" is not listed in the /exclude parameter during a command line install:

.\VDAServerSetup_7_15_3000.exe /quiet /components vda /controllers "dc1.domain.com dc2.domain.com" /enable_hdx_ports /enable_remote_assistance /noreboot /optimize /masterimage /exclude "Personal vDisk","Citrix Personalization for App-V - VDA"

Note: VDA versions after 7.15 CU3 require the /install_mcsio_driver option to enable MCS I/O write cache for storage optimization.

XDDS:7BE07C6A Error – Reference List
https://support.citrix.com/article/CTX202234

Error: ImagePreparationFinalizationFailedCompletely when Creating or Updating MCS Catalog
https://support.citrix.com/article/CTX202229

Install VDAs using the command line
https://docs.citrix.com/en-us/citrix-virtual-apps-desktops-service/install-configure/install-command.html

Install using the command line
https://docs.citrix.com/en-us/xenapp-and-xendesktop/7-15-ltsr/install-configure/install-command.html