Disconnect and Idle session policies are not working in XenDesktop.
Complete the following procedure:
Copy the production VHD and then apply it to a machine outside the Organizational Unit (OU) that have Microsoft GPOs pushing down Citrix registry entries.
You will be able to uninstall the VDA and re-install without issue. When installed, you should apply the VHD to a machine under the OUs pushing out Citrix reg entries (DDC and so on).
Once registered, the policy folder is available under program files > citrix > virtualdesktopagent and xml files are be present.
Test the disconnect policy after 60 seconds, to check if it works without issue.
Conflicting Microsoft GPO with Citrix Policies.