I have noticed something similar.
In the server cfg I can set BL1/XRG and on LFS desktop it is shown as a demo server however demo users cannot join.
By changing /mode= (in server cfg) to demo the server is then visible to demo users even though I have not changed the maxguests and carsmax sections...
/mode=Demo
/track=BL1
/cars=XRG
/maxguests=16
/carsmax=18
I was not that clear...with those settings demo users can join, it is by changing between /mode=S2 and /mode=Demo that seems to make the difference.
Even if I set carsmax to 10 still no demo users can join if /mode=S2 even though lfs desktop will display server as demo.
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Yes, 16 slots and on LFSW it shows it as a demo server but demo users are not allowed to join. Even if I put /carsmax to 12, still no demo users can join.
Interestingly, Lfs Remote is "seeing" the server as a S2 host with the current settings.