This policy setting applies to applications using the Cred SSP component (for example: Remote Desktop Connection).
This policy setting applies when server authentication was achieved via NTLM.
If you enable this policy setting, you can specify the servers to which the user's saved credentials can be delegated (saved credentials are those that you elect to save/remember using the Windows credential manager).
If you do not configure (by default) this policy setting, after proper mutual authentication, delegation of saved credentials is permitted to Remote Desktop Session Host running on any machine (TERMSRV/*) if the client machine is not a member of any domain. If the client is domain-joined, by default the delegation of saved credentials is not permitted to any machine.
If you disable this policy setting, delegation of saved credentials is not permitted to any machine.
Note: The "Allow delegating saved credentials with NTLM-only server authentication" policy setting can be set to one or more Service Principal Names (SPNs). The SPN represents the target server to which the user credentials can be delegated. The use of a single wildcard character is permitted when specifying the SPN.
TERMSRV/host.humanresources.fabrikam.com Remote Desktop Session Host running on host.humanresources.fabrikam.com machine
TERMSRV/* Remote Desktop Session Host running on all machines.
TERMSRV/*.humanresources.fabrikam.com Remote Desktop Session Host running on all machines in humanresources.fabrikam.com