The PAM RDP Applet client fails to login but RDP using the Microsoft client (mstsc.exe) through PAM works with the same target account and password.
The RDP Applet client reads the domain from the credential target application. The domain was misspelled in the target application causing the authentication to fail as seen in the Windows Event Viewer only while using the PAM applet client.
Fixing the spelling of the domain in the Target Account Application resolved this issue.