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Since workflow history preservation is not a requirement in your environment, you may want to consider option 3, which is to deploy a fresh SPWFM farm on sp19app2 and re-register SharePoint. Based on my research, Workflow Manager 1.0 is no longer supported, while SharePoint Workflow Manager (SPWFM) follows the SharePoint Server support lifecycle. Additionally, recent guidance has recommended moving from classic Workflow Manager to SPWFM. A fresh deployment could also help avoid the challenges associated with an unknown CGK and changing the existing workflow endpoint configuration.
References:
Microsoft Workflow Manager 1.0
Trending Issue: Classic Workflow Manager Workflows fail after September 2025 CU for SharePoint
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For your concerns regarding the CGK and certificates:
As far as I know, the CGK works similarly to the SharePoint farm passphrase and is required when joining a workflow farm. If the key is lost, Microsoft provides a documented procedure to reset it. However, the documentation states that resetting the CGK causes new Workflow Manager and Service Bus certificates to be generated, and SharePoint must then be configured to trust those certificates. I found documentation describing the behavior for auto-generated certificates, but I could not find documentation explicitly confirming whether existing custom CA-issued certificates are replaced or preserved during that process. For that reason, if you decide to proceed with a reset on the existing farm, I would recommend backing up the databases and exporting the current certificates (including private keys) beforehand.
Reference: Reset the Certificate Generation Key for SharePoint Workflow Manager
For the supported approach for moving the farm and changing the endpoint:
From what I understand, a DNS alias might be an option, provided that spwfm.contoso.com resolves correctly to the new server and that the workflow endpoint certificate includes the appropriate Subject Alternative Name (SAN). However, I could not find official documentation that specifically addresses changing the endpoint hostname of an existing Workflow Manager farm. Since the endpoint details are stored within the farm configuration, deploying a new SPWFM farm and registering SharePoint against the new endpoint may be a simpler approach than migrating and renaming an existing farm.
Regarding whether you should continue using custom CA-issued certificates or switch to auto-generated ones, custom CA-issued certificates remain a valid option for production, as domain-joined servers typically already trust your internal CA. You could issue a certificate that includes both spwfm.contoso.com and the server FQDN in the SAN field. Auto-generated certificates are simpler to set up, but because they are self-signed, they may require additional trust configuration on the SharePoint servers, including importing the certificates, running the Refresh Trusted Security Token Services Metadata Feed timer job, and repeating the process when certificates are renewed or regenerated. Whichever option you choose, please record the new CGK in a safe place when creating the farm.
After the new farm is ready, you could register SharePoint against it by running the Register-SPWorkflowService cmdlet. Existing workflows may need to be validated and, depending on the scenario, republished. I would recommend testing thoroughly before decommissioning the old server.
I hope this helps address your concerns.