I'm experiencing the same issue with version 10.8.1.
We couldn't connect to the remote PC. This might be due to an expired password. If this keeps happening, contact your network administrator for assistance.
Error code: 0x207
It's not a password issue as I'm getting it generated with a pem file on the EC2 console.
I'm running Windows Server 2022 on an EC2 instance and all has been good. When I disabled Hyper-V to run ESXi image with VMware, I got prompted with this error after I restarted the instance.
Windows can't run ESXi image even though Hyper-V's role is not explicitly installed in the "Add Roles and Features" tool of the Windows Server Manager.
So I disable Hyper-V using BCDEdit and rebooted the instance.
bcdedit /set hypervisorlaunchtype off
When the instance stood up, I couldn't connect. I enabled ICMP and pinged it. Packets are getting transmitted normally. I downgraded to a previous release as suggested in some forums and I still face the same issue.