Error during provisioning: Initial publish failed: Fault type is UNKNOWN_FAULT_FATAL – After waiting for 300 seconds internal template VM: VM123456 is still not powered off. Giving up!

This bug drove me mad until I found one person on the Internet who had actually written down what VMware support told him/her to do to fix it.

The error occurs when publishing the VDI image as an Instant Clone with the DEM/UEM agent installed

The cause:

When deploying an Instant Clone desktop pool, the Connection server creates a template copy of the original image to add the pool image to the Active Directory as a computer object, before deleting the object again and moving to the next stage (creating a replica template)

At that point, the Group Policy process begins and slows down the entire Template process until it times out (after 5 minutes) and does not proceed to the next step which actually deploys the Replica Windows 10 image to AD and creates the instant clones

The fix:

Run Regedit on the Windows 10 gold image that you specified in the Desktop Pool Add the key GPUpdateEnabledOnIT with type DWORD and value 0 to HKLM\Software\VMware Inc.\ViewComposer\ga

3. Shutdown the VM and Snapshot the image and re-deploy or re-publish the instant clone pool using the new snapshot.

4. Do a victory dance as your desktop is deployed (check company manual for acceptable victory dances)

