Hi Sai Teja Ponnuri,
To resolve the unattended execution failure on your Windows 365 Cloud PC, you must address how Windows handles Network Level Authentication with Microsoft Entra ID. Because unattended Power Automate flows cannot natively process modern Entra ID authentication prompts over a background remote desktop connection, the pre-authentication handshake fails and drops the session. You can resolve this by navigating to the Windows Registry at HKEY_LOCAL_MACHINE\System\CurrentControlSet\Control\Terminal Server\WinStations\RDP-Tcp and changing the UserAuthentication registry DWORD to 0. This disables the strict Network Level Authentication requirement, allowing the background service to successfully build the session. You must also ensure your desktop flow connection string utilizes the explicit AzureAD\ prefix before your user principal name to accurately route the credentials.
It is also crucial to verify that your mobile device management platform is not silently overriding your local machine configurations. Intune configuration profiles frequently supersede local settings, meaning an applied policy might be stripping the remote logon right or adding the background account to a deny list, even if your local security policy editor shows everything is configured correctly.
To pinpoint whether your connection block is a permission drop or an authentication failure, open the Windows Event Viewer and check the TerminalServices-LocalSessionManager operational log located under Applications and Services Logs, Microsoft, and then Windows. This log records the precise chronological sequence of remote session requests. Correlating the session drop events in this log with the exact timestamp of your flow execution will reveal the exact security layer terminating your connection.
Hope this answer has brought you some useful information. If it did, please hit “accept answer”. Should you have any questions, feel free to leave a comment.
VPHAN