Index creation leads to large transaction log growth
Referring to MS documentation here. Also Creating a 60GB Index on SQLFool.

What I believe is happening is that when the index is being built with SORT_IN_TEMDB=OFF, the entire index build processed is logged via the DB's transaction log (DB is set to full recovery). (In addition, I expect there to be a high number of page splits due to the scattergun-nature of the GUID column that is being indexed)

When the index is built using SORT_IN_TEMPDB=ON, then most of the transaction log activity is going to be against tempdb which is in SIMPLE recovery mode.