I can confirm that that HWE kernl based on Linux kernel 4.18.x works fine on Hyper-V 2012 R2 (Gen 1) virtual machines.
I discovered this when I tried to install the 18.04.2 ISO and it had the same problem, but when I tried to install 18.04.2 with HWE kernel it worked.
I have now installed the kernel provided by the package 'linux-virtual-hwe-18.04' on our virtual machines. This has allowed us to receive security updates on the virtual machines affected by this bug.
I can confirm that that HWE kernl based on Linux kernel 4.18.x works fine on Hyper-V 2012 R2 (Gen 1) virtual machines.
I discovered this when I tried to install the 18.04.2 ISO and it had the same problem, but when I tried to install 18.04.2 with HWE kernel it worked.
I have now installed the kernel provided by the package 'linux- virtual- hwe-18. 04' on our virtual machines. This has allowed us to receive security updates on the virtual machines affected by this bug.