Interesting. I have a similar situation at a customer which currently has a fresh installation of 2.16, a patched Windows 10 build 1607 LTSR and the same problem.
After looking through all the patches Microsoft has done, there are 2 that strike me as possible candidates. In these a problem was identified with the MSI installer sometimes throwing an error as a known issue:
Known issues in this update
After installing this update, users may receive “Error 1309” while installing or uninstalling certain types of MSI and MSP files.
Then the patch after this, the specifically found issue is fixed:
Improvements and fixes
Addresses an issue that may cause users to receive “Error 1309” while installing or uninstalling certain types of MSI and MSP files.
So I am very curious as to what Microsoft "fixed" here, as it seems all these problems began at around this patch time.
Problem is, all patches after this are cumulative. Does anyone know if it is possible to avoid installing this particular fix?
There was a call logged with VMware, if any new information arises from this, I will post an update.
So, I can confirm this issue is resolved in App Volumes 2.17. A quick update of the agent from 2.16 to 2.17 seems to resolve this issue.