We finally figured out what was happening.
For anyone doing dev on a mac, although you create the webclient.properties under your server/config, when the server starts it attempts to copy the file over to "/var/lib/vmware/vsphere-client/". Since it fails to do that at least on two different Mac PC's that we have used to test this, the serenity client never bypasses the SSO configuration so SSO is always enabled.
To fix it:
Copy your webclient.properties to /var/lib/vmware/vsphere-client/.
Thank you Alfredo.
you answer has directed me to the resolving the issue.
i was not even using a VSA, just a vm with a VC installed on it
i had a problem with the look-up service and the SDK error every time i tried to login to the Web Client.
i went to:
and changed the ip address of the VM to the DNS name of it.
restarted the VC and all is good:)