DC Refreshes and Application Launches may fail intermittently in the case of an unstable SQL Server connection. This can happen when the threshold for connectivity to overall service connectivity to SQL has not been reached but the authentication and/or authorization of a user actually timed out on the back end connection to SQL.
In essence, overall connections to the App-V server may still be maintained and the clients will not go into DO (Disconnected Operations Mode.) Authentications may fail due to intermittent availability of a remote SQL server.
While some have recommended modifying connection timeouts to the SQL datastore, but in my opinion, this would not be addressing the underlying issue. If connectivity is problematic to SQL, first find the root cause of the connectivity.
The error that commonly appears in this scenario is:
"A Network operation did not Complete in Time"
I have also seen this issue pop up when the back end SQL Server’s CPU Utilization was maxed out at 100% making the service temporarily unavailable.