Windows 10 feature updates break activation, change computer name on domain PCs

We have a batch of 40 identical PCs, refurbished by an MS licensed refurbisher, who activated windows through KMS. When W10 version 1703 was installed, all PCs lost their activation status and the computer name (but not the netbios name) changed to a random string beginning with "WIN-".  They also couldn't log onto the domain, initially.  We resolved that on all PCs and assumed that would be the end of it.

But now, version 1709 is doing the same thing, except this time, it's weirdly reverting to the computer name originally given by the refurbisher (although again, netbios name stays the same).  So it looks like this will crop up every time there's a new feature update.

When the original 1703 issue happened, nobody on the net seemed to have heard of this behaviour and couldn't believe that a feature update could cause it. However, the refurbisher knew about the issue and had activation codes paired to dell service tags ready to send.

Has anybody else heard of this behaviour or have any idea what's happening or how we could avoid it in future?
mark_D74Asked:
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JohnBusiness Consultant (Owner)Commented:
No. Ask the licensed reseller to (a) explain what they did and (b) fix it. We have not had any machines (none) that lost activation because we upgraded.
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McKnifeCommented:
Of course this was a human error. The computer names suggest that no inplace upgrade was performed, but a clean installation.

So look at the procedure that was used for updating.
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Cliff GaliherCommented:
Did I read that right that the Refurbisher activated windows with KMS before handing off the devices to you??

Because that isn't a legal way if licensing and if true, shows this refurbusher is operating using one or more sketchy practices. And depending on what other corners they cut  could be a severe cause for concern.

At this point you may want to contact Microsoft, get legit licenses if they find yours aren't, and reimage.  Because what you describe is not normal and I suspect the refurbisher here is at fault.
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mark_D74Author Commented:
@ John Hurst I think you're right - I did ask last time this happened, but the tech I was dealing with clearly didn't know why it was happening, just that a spreadsheet of KMS product keys would solve it. So I just activated using command line.

@ McKnife - A clean install would wipe the NETBIOS name.  I didn't even know it was possible for the two names to be completely different, but when this happens, System settings shows me that the "computer name" has changed to something random. But I've been able to see what it was changed FROM by going to the dialog that lets you change the computer name and hitting the "more" button. This shows me the NetBIOS name, which will be the original, correct name. I can then back out of there and correct the PC's "computer name". Reboot, and I can log into the domain as normal.

@Cliff Galiher Yes - that's correct. When the problem arose first, I asked them for a list of MAK keys, as I always assumed a KMS server would have to be in-house and we'd always need to be able to re-activate without their help.  But that was apparently not possible, so I got KMS keys. Is it definitely the case that refurb licenses can't use KMS?
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JohnBusiness Consultant (Owner)Commented:
I would check with the reseller and ask for legitimate keys. If you go to Microsoft you will likely have to re-purchase keys.
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Cliff GaliherCommented:
Yes, it is definitely the case. KMS is strictly a VL option and VL agreements are not available to partners on behalf of clients. That's distinctly a shady practice. MS has programs specifically for legitimate refurbish partners and this would never happen under any of those programs. Which is why I'd contact MS instead of the reseller. They've already proven themselves dishonest and MS is easy to work with to "get right" and should be aware of the Refurbisher anyways.  Either way I'd be reimaging those machines. I would not trust the install the Refurbisher did at this point.
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☠ MASQ ☠Commented:
Cliff's correct KMS is never used on refurbs unless it's installed by the users, registered refurb operators also should apply a sticker identifying the refurb OS (this is separate from CoA's and still applies to Win 10 which doesn't use CoA stickers).  You can check your provider's credentials here:
https://www.msregrefurb.com/RRPSite/OnlineDirectory.aspx?setlang=en
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McKnifeCommented:
True, it should wipe the netbios name and all, so something is strange - you have not commented on how the upgrade was done.

But clearing up the licensing uncertainties should be your priority, I agree.
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mark_D74Author Commented:
@McKnife the upgrade was done through windows update, followed by reboot
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McKnifeCommented:
Did you come to a conclusion?
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mark_D74Author Commented:
@McKnife  Still working on it - I expect I'll be closing off this question in a few days.
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McKnifeCommented:
It would be really interesting to know, please follow up.
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mark_D74Author Commented:
I'm still working on this - I'll certainly update when I get to the bottom of it. Refurbisher has told me that only KMS keys are available under the refurb scheme. This sounds far-fetched as well as conflicting with the advice above.  I contacted MS and was given a number to phone, which I will as soon as I get a spare ten minutes.
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McKnifeCommented:
After 2 months, surely this must have come to an end - Mark, will you let us know?
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mark_D74Author Commented:
This is dragging on quite a bit and I can't resolve this from a technical point of view right now as I'm forced to prioritise other things.  But I believe contributors have helped more than enough to deserve points.  I hope this is in order.
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Mike KortenhausCommented:
I worked with Microsoft support on this issue and in my case it was caused by old unattend.xml files located on the system.  There were 2 files from my image located in the root of C: and also in C:\Windows\Panther.

I have done a small test and with those files deleted, the feature update does not cause the system to rename.
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