Hello,
For all those having issues with DEM not picking up settings when you install it in a Horizon Cloud Next-Gen environment, I hope this will help.
IF you specify the config file path through the Horizon Universal Console, the DEM agent will run as if you installed it explicitly in No-AD mode. If you don't configure that, the agent is just installed, in a kind of "dormant" fashion. If you then apply config via GPO, it will pick that up.
Then, we have 2 possible solutions.
1. Do not specify the config file path through the Horizon Universal console.
2. Install the DEM agent in the Golden Image.
DEM Agent (FlexEngine) installation Walkthrough