Windows Remote Desktop Licensing Error

Hi,

We have three Windows Server instances hosted on Oracle Cloud Infrastructure (OCI).

For the past two days, we have been unable to connect to any of these servers using Remote Desktop (RDP). We receive the following error:

Remote Desktop Connection

A licensing error occurred while the client was attempting to connect (Licensing timed out).
Please try connecting to the remote computer again.

Error code: 0xf06
Extended error code: 0x0
Timestamp (UTC): 09/18/26 06:35:37 PM

From our research, this error appears to be related to Remote Desktop Services (RDS) licensing. However, as far as we are aware, RDS is not installed or enabled on these servers. They are standalone Windows Server instances and are only accessed for normal administrative RDP sessions.

We also checked the installed Windows features using:

 --> Get-WindowsFeature RDS-RD-Server,RDS-Licensing

Both Remote Desktop Session Host and Remote Desktop Licensing show as Available, not installed.

The servers have been running without this issue for more than seven years, and this problem has appeared suddenly across all three instances.

Network connectivity to RDP also appears to be working. For example:

 --> Test-NetConnection <server-ip> -Port 3389

returns:

TcpTestSucceeded : True

So port 3389 is reachable, but the RDP client fails during the connection process with the licensing timeout.

Has anyone encountered this behaviour on standalone Windows Server instances without RDS installed?

Could this be related to a recent Windows update, licensing component issue, corrupted RDP licensing cache, or a change in how Windows validates administrative RDP sessions?

Any guidance on which server-side logs, registry entries, licensing components, or services we should check would be greatly appreciated.

Regards,
Dawood