The firewall was open. WinRM tests passed clean. One month of troubleshooting a network that wasn't broken — because the Keyfactor iis-orchestrator was silently falling back to HTTP the entire time.
Port 5986 wasn't responding to the Keyfactor iis-orchestrator. The natural read: something in the network path was wrong.
One month in, a senior Keyfactor engineer looked at the case and asked for an upgrade to 3.0.0. The upgrade worked immediately.
The 2.6.2 changelog entry reads: "Fixed error when connecting to remote computer using HTTPS; was defaulting to HTTP."
Version 2.6.1, when configured for HTTPS, silently falls back to HTTP. It was never negotiating TLS. It was never actually attempting port 5986 over HTTPS.
Every WinRM connectivity test passed because the infrastructure was fine. The extension just wasn't using the right protocol.
The Schannel errors in the logs were a symptom of the fallback — not the cause. The software was reporting TLS errors while quietly not using TLS at all.
App failing while connectivity tests pass is a software problem, not a network problem. Before you ticket the network team, pull the changelog on whatever extension is in the path.
This is a firsthand operational incident. The root cause was confirmed by the Keyfactor 2.6.2 changelog entry and resolved by upgrading to 3.0.0. No speculation is presented as fact.