It used to work for us in a lab. In production here is what I got in the CSWinAgent.log file:
CSWinAgent 04/11/2005 11:42:51 A 0121 5332 Client connecting from 10.x.x.x:3633
CSWinAgent 04/11/2005 11:42:51 A 0371 0588 RPC: NT_MSCHAPAuthenticateUser received
CSWinAgent 04/11/2005 11:42:51 A 0048 0588 NTLIB: Attempting Windows authentication for user johndoe
CSWinAgent 04/11/2005 11:42:51 A 0048 0588 NTLIB: Windows authentication FAILED (error 1300L)
CSWinAgent 04/11/2005 11:42:51 A 0433 0588 RPC: NT_MSCHAPAuthenticateUser reply sent
Tried to look for an explabnation for error 1300L but this is all I could find:
1300L ERROR_NOT_ALL_ASSIGNED
Indicates not all privileges referenced are assigned to the caller. This allows, for example, all privileges to be disabled without having to know exactly which privileges are assigned.