CopyFile() (and others) not copying entire file properly

Question

I'm using CopyFile() in a Windows Installer deferred custom action running in SYSTEM context to make backups of files in case rollback is required (seemingly a simple operation).  I'm finding in some files, the file is not properly copied.  The files that are giving me problems are encrypted SQL MDF/LDF databases that are encrypted by a third party application.  Only the file itself is encrypted.  No file system level encryption is present.

Due to their contents, it is difficult to figure out exactly what is being copied but I know for certain that the file is truncated to the sector size.  The original file is slightly larger than the copy.  I've tried CopyFileEx() and SHFileOperation() all with the same results.

If I create a small console application (which does not run in SYSTEM context) to perform the exact same copy I'm duing in the custom action, the copy operation works as expected.  Copy also functions as expected if I copy the file using Windows Explorer.  Only these APIs in the custom action seem to give incorrect results. 

The system I'm currently using in Windows 7 x86 w/o SP1 to test this installer.  I've not investigated others yet.  I've turned off Windows Defender.

Any idea what could be turning this simple project into something that has taken me several days now?