Hi Cloudy,
The Windows Security prompt in your second screenshot reveals the reason your Single Sign-On is failing. The authentication dialogue shows the domain as your local client machine name rather than your actual Active Directory environment. This indicates your system is attempting to pass a local machine account token instead of a valid domain credential to the remote server. For Remote Desktop Single Sign-On to function properly via Kerberos, the Local Security Authority on your client must obtain a Ticket Granting Ticket from your domain controller during your initial Windows login. You need to ensure you are logged into your physical client desktop using your domain credentials so the system can seamlessly delegate that specific token to your RDS environment.
Your Group Policy configuration for delegating default credentials under the Computer Configuration, Administrative Templates, System, and Credentials Delegation path is perfectly configured for your target servers. Furthermore, you were correct to disable Remote Credential Guard, as this feature explicitly blocks the type of credential delegation required when brokering connections through an RD Gateway. Since your policies are already in place, simply joining this client to the domain if it is not already and authenticating your initial desktop session against your Active Directory will allow the Kerberos handoff to succeed without prompting you for a password when launching RemoteApps on Windows Server 2025.
Hope this answer brought you some useful information. If it did, please hit “accept answer”. Should you have any questions, feel free to leave a comment.
VPHAN