Solved - posted for others.

There is something with the Adagio installer which somehow creates this weirdness when running the workstation setup on a terminal server.

Our env:

1- organizational unit for terminal server users,
2- no admin privilge assigned.

Fix:

1- remove the problematic profile from the terminal server,
2- remove the user from the TS OU putting them back into the main OU,
3- add the admin right,
4- run WKSETUP on all modules,
5- restore right and OU...

Cheers, JK