I think I've found what is going on.
I checked this in a fresh VM as well.
Works fine, also on my regular PC. But my normal user profile has a space in the name. Making it, for example: C:\Users\Michelle MWZ\ (note the space), which upsets the deployment process. Well, it upsets a lot of tools that run on Windows that are initially made for Linux.
Maybe a bug in kind or vctl?
@Mikero(mentioning you as per recommendation from someone on the vExpert Slack).
vExpert 2020