Acronis Backup: Replication fails with "Cannot use this type of backup archive"

Symptoms

1. You have a backup plan with replication. Backup format is set to Automatic selection in Backup options.
2. The resulting archive is in Version 11 format as the original archive was created by older product version
3. After the archive is deleted in original location, replication fails with the following error:

   Cannot use this type of backup archive.