I think we are all in agreement that this is not an issue within the Duplicati code, but rather something within Windows 10. If so, unless a future Windows Update addresses this, it is not likely to be resolved.
Hardware - I assume you mean the USB WI-Fi dongle? Panda Wireless PAU05.
I cloned the VM and modified the clone so that instead of having the USB Wi-Fi as part of its configuration, it was accessed using USB pass-through. Not sure this is any different from the Windows 10 perspective, but I thought it was worth trying. End result = no change.
I think at this point it is probably not worth pursuing further. While I would have liked to move the backup traffic off of the virtual NIC, I can keep using it.
I cannot imagine anything within Duplicati that would be sensitive to the NIC. The requests are all standard requests using sockets (or HTTP). There is nothing in the code that is aware of what network you are using, so I can only guess that it is somehow related to a network setting or firewall issue.
There is a small tool included with Duplicati called Duplicati.Commandline.BackendTool.exe which you can use to do more isolated tests. You mention that the GET command fails, so you could try something like:
> Duplicati.CommandLine.BackendTool.exe PUT b2://folder?auth=... C:\large-file.bin
> Duplicati.CommandLine.BackendTool.exe GET b2://folder?auth=... C:\large-file.bin
Hopefully this would get you close to an error message and a reproducible setup.