You may encounter issues with the C:\ Drive not being properly redirected from the guest to the host (and thus causing the “Documents/My Documents” folder to not be redirected and synchronized between the host and the guest) when Smart Card Redirection has been disabled. Any features dependent upon connections from the guest to \\TSClient\C will also be affected. Please note that this is an intermittent problem and it may not occur on all machines. This is a known issue and is related to a well-known issue that was once affecting Windows Server 2003 RDS servers a few years back. That issue was addressed with a hotfix and is discussed in the
following KB article:

“When you use Remote Desktop Connection to connect to a Windows Server 2003-based terminal server, or to Windows XP, the first drive letter of the computer from which you connect is not redirected to the Terminal Services session”

For MED-V scenarios, smart cards are disabled in MED-V default for authentication. This configuration can be set under the following registry key:

Key: HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Medv\v2\UserExperience

Value: SmartCardLogonEnabled

It defaults to 0. It needs to be turned on by setting to 1 to allow for Smart Card use. Enabling this will also resolve the issue mentioned above. NOTE: If SmartCardLogonEnabled and CredentialCacheEnabled are both enabled, SmartCardLogonEnabled overrides CredentialCacheEnabled.

Right now this workaround will be the only remediation provided for this issue. There will be no hotfix for this issue.