Hello Dom,
Sorry to hear you're facing a tough issue. Here are my analysis and suggestions:
The strongest lead is the FSLogix-roamed OneDrive state, not the OneDrive installation. Microsoft explicitly states that IncludeOneDrive=1 redirects the OneDrive cache into the profile container, but OneDrive does not support multiple simultaneous connections using the same profile, which closely matches your WTS1 → WTS2 reproduction pattern.
I would first verify HKLM\SOFTWARE\FSLogix\Profiles\IncludeOneDrive and the FSLogix version/configuration on both hosts, then reproduce the issue with a brand-new FSLogix profile. If the new profile works across WTS1/WTS2, the existing container's OneDrive/identity state is the likely culprit; Microsoft confirms that OneDrive, TokenBroker, OneAuth and IdentityCache can reside in FSLogix-managed profile data.
When the error occurs, do not immediately delete settings; collect %LocalAppData%\Microsoft\OneDrive\logs first, then use the settings reset as a workaround. Microsoft confirms 0x8004DEF4 can have several causes, so the logs are needed before identifying a definitive root cause. I would also move Entra Connect off WTS2 when possible, although there is currently insufficient evidence to call it the cause.
Let me know if it works.