I am also getting this error

Thanks Adam, seems with the latest version and using -connect AND -ip everything works.
You are awesome.

I'm not aware of that parameter in the command line, but we do have it set in the server.cfg.
Without this, it will get a steam ticket error issue and keep getting kicked. However the HC can still only connect from another set of hardware, the localClient/HeadlessClient IP whitelist prevents the Steam Ticket error from kicking.

Tried using the hostname(computer name) and issue seemed to persist.
Using the -ip method for the HC, it should be the same as the server's IP(the one that is also in -connect= ?)

Should mention tried changing the IP the dedicated server listens on from the first in the range to the last and everything in between, same results.
Given the behavior of how the HC being started first prevents others from joining the server, yet it still shows up in the server list, makes me believe it is some form of port or IP binding issue.
Having a way to bind the HC to use a certain IP instead of 0.0.0.0 may fix this issue, or a way to change the server's query and steamquery ports as before they were hardset, this was not an issue since we used a range +7 and +9 the join port.

OS via dxdiag:
Windows Server 2008 R2 Standard 64-bit (6.1 Build 7601)

Do you have a batch file example for this?
Tried this method, but the real client does not start properly as well using this method.