We had a bunch of newly built Windows 10, version 1607, PCs where App-V 4.6 failed to start.

It was our own fault, App-V 4.6 is not supported on Windows 10.

It did work, until we started using Windows 10 v1607.  An upgrade to v1607 worked fine.  It was a new build where App-V 4.6 didn’t work.

It’s not as if we could ask Microsoft.  Unsupported product is unsupported.

Much Googling occurred to dig up this article
Driver Signing changes in Windows 10, version 1607.

Starting with new installations of Windows 10, version 1607, the previously defined driver signing rules will be enforced by the Operating System, and Windows 10, version 1607 will not load any new kernel mode drivers which are not signed by the Dev Portal. OS signing enforcement is only for new OS installations; systems upgraded from an earlier OS to Windows 10, version 1607 will not be affected by this change.

Existing drivers do not need to be re-signed. To ensure backwards compatibility, drivers which are properly signed by a valid cross-signing certificate issued prior to July 29th, 2015 will continue to pass signing checks on Windows 10, version 1607.

So there is the answer.  We were using App-V 4.6 SP3 HF05.  The sftplaywin81.sys file was signed on 22 September 2016.  Which is later than July 29th, 2015.

We downgraded to HF03, as sftplaywin81.sys was signed on the 16th August, 2014.

Which fixed the problem of App-V not working.