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If I launch an application while physically being at the server and then some time later decide to remote into the same server's console session ( /admin flag) and then log out, will that log out close the application that I launched while physically being at the server? This is usually something that I could test myself but in this scenario gaining physical access to the server is a rare opportunity.

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Yes, logging out will close all the applications, same as logging out from the console does (by going Start > Log Out)

If you just close the RDP window (by clicking the x) that's the same as just walking away from the console - everything will continue to run.

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