Why is my *first* time machine backup much larger than my disk space used?

Why would the first backup on a new time machine shared drive be almost 100GB larger than the data stored on the disk? I understand why subsequent backups will take more space, but this is a brand new backup and there's only been a few GB of disk changes since the backup started.

The picture below shows a 604GB backup of a 1TB system disk with 490GB available.

UPDATE: the backup didn't finish until it claimed to have backed up more than 700GB.

UPDATE: Although a big portion of my disk is Parallels VMs, Parallels wasn't running during the backup and hasn't been running for weeks. (I only need VMs to occasionally run some Windows software every month or two.)

What could be causing this? I'm running MacOS Catalina 10.15.4 if that's relevant.

"there's only been a few GB of disk changes since the backup started."

Were you using the VMs? Time Machine is somewhat inefficient in that it will copy an entire file if a single modification is made. So if your VM file is 100 GB in size, and it gets modified, then that's another 100 GB that gets copied.

If the first backup goes on for longer than an hour, then it will included deltas.

Some people prefer to exclude VMs from TM and manage backups for them using some other method. You seem to have c. 300 GB of VM data, so if you're using those regularly, you will add 300 GB to your TM volume every day.