Hello,
From the screenshots it appears that the application is crashing at startup. If you are configured to re-start Then the client might be reconnecting and it appears that the session is starting without issue.
The best way to troubleshoot application fault errors is to turn on Server Operation Logging.Go to the Logging page on the Local Server Configuration program. Turn on Server Operation Logging and set the level to 6. Configure a directory for the log files. Make sure that the telnet users have write access to the configured directory.
Run sessions as usual, collecting a few event log errors. Once you have some application faults, please send me the files from the Log File directory and the Application Event Log from the same time frame as the Server Operation Logging.