When configuring a new RDS farm node on Windows Server 2022/2019/2016/2012 R2, you may see the following tray warning pop-up:

Licensing mode for the Remote Desktop Session Host is not configured.
Remote Desktop Service will stop working in 104 days.
On the RD Connection Broker server, use Server Manager to specify the Remote Desktop licensing mode and the license server.

At the same time, there will be warnings with an Event ID 18 in the Event Viewer:

Log Name: System
Source: Microsoft-Windows-TerminalServices-Licensing
Level: Warning
Description:
The Remote Desktop license server UK-RDS01 has not been activated and therefore will only issue temporary licenses. To issue permanent licenses, the Remote Desktop license server must be activated.

These errors are an indication that your RDS is running in the License grace period mode. You can use Remote Desktop Session Host for 120 days without activating RDS licenses during the grace period. When the grace period expires, users won’t be able to connect to RDSH with an error:

Remote Desktop Services will stop working because this computer is past grace period and has not contacted at least a valid Windows Server 2012 license server. Click this message to open RD Session Host Server Configuration to use Licensing Diagnosis.

The number of days remaining before the RDS grace period expires can be displayed using the command:

wmic /namespace:\\root\CIMV2\TerminalServices PATH Win32_TerminalServiceSetting WHERE (__CLASS !="") CALL GetGracePeriodDays

Check the Licensing Settings on the Remote Desktop Server

To diagnose the problem, run the Remote Desktop Licensing Diagnoser tool (lsdiag.msc, or  Administrative Tools -> Remote Desktop Services ->RD Licensing Diagnoser). The tool should display the following error:

Licenses are not available for the Remote Desktop Session Host server, and RD Licensing Diagnoser has identified licensing problem for the RD Session Host server.
Licensing mode for the Remote Desktop Session Host is not configured.
Number of licenses available for clients: 0
Set the licensing mode on the Remote Desktop Session Host server to either Per User or Per Device. Use RD Licensing Manager to install the corresponding licenses on the license server
The Remote Desktop Session Host server is within its grace period, but the Session Host server has not been configured with any license server.

As you can see, there are no licenses available to Clients on the RDS Host because the Licensing Mode is not set.

The most likely problem is that the administrator has not set the RDS Licensing Server and/or the licensing mode. This should be done even if the license type was already specified when the RDS Host was deployed (Configure the deployment -> RD Licensing -> Select the Remote Desktop licensing mode).

Configuring the RDS Licensing Mode on Windows Server

There are several ways to configure host RDS licensing settings:

• Using PowerShell
• Via the Windows Registry
• Using the Group Policy (preferred)

Set the Remote Desktop licensing mode via GPO

To configure the license server settings on the RDS host, you must use the domain GPO management console (gpmc.msc) or the local Group Policy editor (gpedit.msc).

On a standalone RDSH host (in a domain and workgroup), it’s easiest to use local policy. Go to Computer Configuration -> Administrative Templates -> Windows Components -> Remote Desktop Services -> Remote Desktop Session Host -> Licensing.

We need two GPO options:

• Use the specified Remote Desktop license servers – enable the policy and specify the RDS license server addresses. If the RD license server is running on the same host, type 127.0.0.1You can specify the addresses of multiple hosts with the RDS Licensing role separated by commas; 
• Set the Remote Desktop licensing mode – select the licensing mode. In our case, it is Per User. 

Remote Desktop Issue.There is a problem with your Remote Desktop license, and your session will be disconnected in 60 minutes. Contact your system administrator to fix the problem.

Set RDS licensing mode from the PowerShell prompt

Open a PowerShell console and check that the RDS licensing server address is configured on your RDSH:

$obj = gwmi -namespace "Root/CIMV2/TerminalServices" Win32_TerminalServiceSetting
$obj.GetSpecifiedLicenseServerList()

If the RDS license server is not configured, you can set it using the command:

$obj.SetSpecifiedLicenseServerList("uk-rdslic1.woshub.com")

You can also set the licensing mode (4 — Per User, or 2 — Per Device):

$obj.ChangeMode(4)

You can also configure the licensing parameters of the RDS host via a host with the RD Connection Broker role:

Set-RDLicenseConfiguration -LicenseServer @("uk-rdslic1.woshub.com","uk-rdslic2.woshub.com") -Mode PerDevice -ConnectionBroker "uk-rdcb1.woshub.com"

Configuring RDS licensing settings via the registry

In the HKLM\SYSTEM\CurrentControlSet\Control\Terminal Server\RCM\Licensing Core key, you will need to change the DWORD value of the parameter LicensingMode from a value of 5 (license mode not set):

• 2 – if Per Device RDS licensing mode is used;
• 4 – if Per User licensing is used.

You can change the registry setting manually by using regedit.exe or following PowerShell commands that allow you to change the values of registry items:

# Specify the RDS licensing mode: 2 - Per Device CAL, 4 - Per User CAL
$RDSCALMode = 2
# RDS Licensing hostname
$RDSlicServer = "uk-rdslic1.woshub.com"
# Set the server name and licensing mode in the registry
New-Item "HKLM:\SYSTEM\CurrentControlSet\Services\TermService\Parameters\LicenseServers"
New-ItemProperty "HKLM:\SYSTEM\CurrentControlSet\Services\TermService\Parameters\LicenseServers" -Name SpecifiedLicenseServers -Value $RDSlicServer -PropertyType "MultiString"
Set-ItemProperty "HKLM:\SYSTEM\CurrentControlSet\Control\Terminal Server\RCM\Licensing Core\" -Name "LicensingMode" -Value $RDSCALMode

Once you have made the changes, restart your RDSH server. Then open the RDS Licensing Diagnoser console.  If you have configured everything correctly, you should see the number of licenses available for clients and the licensing mode you have set (Licensing mode: Per device).

RD Licensing Diagnoser did not identify any licensing problems for the Remote Desktop Session Host.

Also note that if the RD Licensing Server has, for example, Windows Server 2016 OS and CALs for RDS 2016 installed, you will not be able to install RDS CAL licenses for Windows Server 2019 or 2022. The 'Remote Desktop Licensing mode is not configured'error persists even when you specify the correct license type and RDS license server name. Older versions of Windows Server simply don’t support RDS CALs for newer versions of WS.

In this case, the following message will be displayed in the RD License Diagnoser window:

The Remote Desktop Session Host is in Per User licensing mode and no Redirector Mode, but license server does not have any installed license with the following attributes:
Product version: Windows Server 2016
Use RD Licensing Manager to install the appropriate licenses on the license server.

You must first upgrade the version of Windows Server on the license server or deploy a new RD License host. A newer version of Windows Server (for example, WS 2022) has support for RDS CALs for all previous versions of Windows Server.