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User CALs for Local users on a Domain joined 2016 server

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We have a system that runs some inventory management software that requires local accounts for remote terminals to log into the server.  (this is not software that I manage) In the past, the servers were running Windows Server 2008 and were not joined to the domain.  We have finally convinced the powers that be that these servers need to be joined to our Domain if they are going to continue to run on our network, as well as the need to upgrade them to Windows Server 2016.  

We have run into an issue in our Dev environment when testing to get this working.  We have purchased 24 RDS User cals and added them to our existing license server.  The new domain joined 2016 servers are pointed to the license server and everything works fine as long as you are logging in with an AD account.  However, when logging in with a local account, we get an error message stating there are no RDS user CALs available.  Running the RDS license Diagnoser as a local user shows that the Application server is looking at the license server, but is showing 0 licenses available.  

I have seen others with this same scenario and the answer was it's not possible to use a license server on a domain joined computer for RDS cals for local users.  The question I haven't seen answered is this:

Will it work if we install the CALs locally on the Domain joined Windows Server 2016 machine that the users are connecting to via RDS with local accounts?


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