Thank you for the replies.
I am able to connect to the AppVol manager admin via port 443/SSL from a browser so the services and firewall seem to be OK on the manager server.
OK I have found that when logging in as a domain user, I no longer am getting the 500 error. Interesting. We would prefer to use the local Administrator account if possible from a capturing VM (creating AppStacks). It has always worked in the past. To me that would seem the cleanest way to do it but I guess we can work around it if needed.
Now that we are no longer getting the 500 error with a domain account, I tried recomposing a test pool with the new AppVol 2.12 agent. When the domain user is logging in to their VDI session, the connection to the VM is terminated while it is logging in to Windows 10. The user sees the login process start, but during it, the connection is terminated and the user cannot connect to it after that. If I remove the AppVol agent and recompose, the login works just fine. So it appears there is still an issue with the AppVol agent and whatever it is doing at logon. I'm now looking at this issue.
Thanks again for the help.