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Failures with discovery when using --server and trusts can be confusing. We were asked to clarify this. Background (from email): Question: What is the reasoning behind having ipa-client-install disable dns_lookup_realm and dns_lookup_kdc when the caller specifies the server? Answer: --server is used to pin IPA client to a specific IPA server. This means both SSSD and Kerberos library ensured to not try to access other servers, both LDAP and KDC. This predates FreeIPA's integration with Active Directory where we have to do dynamic discovery of the users' AD domains and as result do authentication against their domain controllers. If you don't want to pin IPA client to a specific IPA server, you don't need to use --server option. In RHEL 7.3 we have support for sites in FreeIPA, which should work automatically by choosing closest server. Alternatively, you can use configuration management tools to set dns_lookup_realm and dns_lookup_kdc on the clients that need to be pinned to a specific IPA server otherwise.
--server is now documented in 3.3.2. Installing a Client Non-interactively: https://access.redhat.com/documentation/en-US/Red_Hat_Enterprise_Linux/7/html/Linux_Domain_Identity_Authentication_and_Policy_Guide/client-install.html#client-install-non-interactive