I was working on one of my other projects which build on Oracle Ravello Cloud and I deployed Windows Server 2016 Virtual Machine, after completing the full Windows Update I was unable to login to the Virtual Machine using Remote Desktop connection (RDP).
First of all, let’s see how can we resolve the issue. I just did a bit of a research and found this workaround to fix the issue. I hope this will help all of my fellow readers to overcome if there is a similar issue like this.
This is the error message appeared, when I was trying to make a RDP connection to my cloud server
An authentication error has occurred.
The function requested is not supported
Remote computer: [IP_ADDRESS_OF_THE_SERVER]
This could be due to CredSSP encryption oracle remediation.
For more information, see https://go.microsoft.com/fwlink/?linkid=866660

I fixed it with a small group policy edit, just open a “Run” prompt and type “gpedit.msc” and hit “Enter”

Navigate to Computer Configuration -> Administrative Templates -> System Credential Delegation and select the “Encryption Oracle Remediation” , double click to make the changes

Enable the Group Policy Configuration and set the “Protection Level” as “Vulnerable“

After changing the configuration changes, my RDP connection was successful.
Reason Behind The Issue
This was due to the Security bulletin released on 13th of March 2018 to address the CredSSP, “Remote Code Execution” vulnerability which is CVE-2018-0886.
Note: If you are disabling the option with this registry edit you are exposed to the identified vulnerability.