Windows maintains a cache of RDP licenses in the registry. If this cache becomes corrupted—often due to abrupt shutdowns, virtual machine snapshots being reverted, or changes in the network adapter—the client presents a "dirty" license. The server sees this invalid token, fails to validate it (0x904), and in its frustration, resets the connection (0x7) to clear the state.
Once you resolve error code 0x904 extended 0x7, prevent recurrence with these policies: Windows maintains a cache of RDP licenses in the registry
If your network has a Maximum Transmission Unit (MTU) mismatch (e.g., VPN or PPPoE connections), the HTTP CONNECT packets sent to the RD Gateway may be fragmented. The server sees a malformed request and returns an invalid response, triggering 0x904. Once you resolve error code 0x904 extended 0x7,
"Remote Desktop Connection error code 0x904 extended error code 0x7 full" the VM from the portal
Execute the following command to reset the keys folder: Rename-Item -path "C:\ProgramData\Microsoft\Crypto\RSA\MachineKeys" -NewName "MachineKeys_old" . the VM from the portal. Quick Alternative: Microsoft Store App