Creating a new Windows Server 2016 RDS Collection fails with: ".FQDN Unable to configure the RD Session Host server .FQDN. Invalid operation"

Problem

You need to add an additional RD Session Host Server to an existing RDS deployment then create a new RDS Collection with the server so you proceed to add the server:

Once you’ve successfully added the server, you proceed to add the server as a RD Session Host Servers in the Remote Desktop Services management console:

Once successfully added as a RD Session Host server, you proceed to create a new collection with the server:

The collection is successfully created by the add server operation fails with the following error message:

<ServerName>.FQDN Unable to configure the RD Session Host server <ServerName>.FQDN. Invalid operation

Solution

As per the following KB article:

You cannot create a session collection and an error occurs in Windows Server 2012
https://support.microsoft.com/en-us/help/3014614/you-cannot-create-a-session-collection-and-an-error-occurs-in-windows

… this can be caused by GPOs configuring one of the following two settings:

Computer Configuration\Administrative Templates\Windows Components\Remote Desktop Services\Security

Computer Configuration\Administrative Templates\Windows Components\Remote Desktop Services\Remote Desktop Session Host\Licensing

In this example, the environment had a GPO that configured the RDS Licensing server:

To correct the issue, move the computer object to another OU to prevent the GPO from being applied thus unconfiguring the licensing server:

Delete the collection and recreate it: