How does a fail grade in the most recent transcript affect H1B?
If your question is about H1B application getting picked and processed during application stage, I don't think it would affect. The criteria to be eligible for H1B is Master's degree and a job which pays your on par with the prevailing wage & other supporting documentation. If these two things are good and if the candidate's application gets picked up I don't see any reason an F would be counted against while processing the application. If I were you, I'd be only worried about how accurate is the information I provide to the attorney in support of my application. If that's taken care, an F hardly matters. USCIS is not going to judge your academic performance if you were already awarded Master's degree from the University, which itself means that you've satisfied the department's & University's academic requirements.