Hyper-V settings hang after installing RemoteFX on Windows 2008 R2 Service pack 1

On a Windows Server 2008 R2-based computer that has Service Pack 1 (SP1) installed and has RemoteFX, Hyper-V VM settings will hang if following conditions are true:

• When Domain Controller is installed on the same physical server as the RemoteFX server.
• When the following Group Policy setting is enabled:
  Computer Configuration/Windows Settings/Security Settings/Local Policies/Security Options/Interactive Logon: Message text for users who are trying to log on.

You may also receive following error when you refresh the host on SCVMM console:

Error (2927)
A Hardware Management error has occurred trying to contact server <FQDN Server Name>.
(Unknown error (0x80338029))

The Hyper-V host status in SCVMM may show as "Not Responding".