That shouldn't be a limitation of the freeware version. Is that file located on a network share? In that case VSS won't be able to get access to that file due to Microsoft limitations.

The file is on one of the HDDs on my PC; it is not on a network share. I currently have no network shares setup. The file shown is just an example. Seems any 'open' file doesn't get backed-up (with above noted error shown in the log). BTW when I tested Arq Cloud Backup it had no problem with 'files being used by another process'. I was hoping to used CBB instead of Arq because I prefer CBB's UI and restore functionality. But, before I purchase CBB I need to get this locked file issue resolved; if it can't be resolved then I'll probably revert to Arq.

Ok, I guess we would need to troubleshoot that in the ticket system.
Just go to tools > diagnostic menu and send us the logs for investigation. You can specify this thread in the issue description and I'll take the case over from there.

I submitted the ticket as you advised. What is the next step?

Sorry, don't see any logs from you in our ticket system.

You can generate the log archive manually and send it to us via email:
run command prompt and execute the following commands:

chdir {Backup software installation directory}
.\cbb.exe saveLog -p %userprofile%

To find the file you can just execute this:
explorer %userprofile%

Just send this file as an attachment mentioning this forum thread to supportatcloudberrylabdotcom
If it's to big you can upload to any file-sharing service of your choice and send us the link.

I have generated the log file as instructed above and sent it to the email indicated.

Note: The file, as generated, was named 2018-11-06T12_30_00.cblzip . I'm pretty sure
the correct naming should have been 2018-11-06T12_30_00cbl.zip . You might want to
investigate what caused cbb.exe to misname the file.