This problem occurred in a very specific multi-host environment with strict security policies set.

When trying to add the child server by providing credentials of a domain administrator account, the following error occurred:

nxserver --serveradd testdrive 
NX> 830 Connected to NoMachine remote server.
NX> 763 Could not authenticate on the remote server using server's public
key.
NX> 763 Would you like to login on the remote server as a privileged user
to add
NX> 763 this key and try again? [yes|no]: yes
NX> 830 Connected to NoMachine remote server.
NX> 765 Username: domain_admin
NX> 766 Password:
NX> 500 ERROR: Cannot add server 'testdrive:4000'. Provided user is
not a system administrator on remote machine.
 

As a temporary workaround, add the child server as local administrator. A similar problem can occurr also when trying to add a node (nxserver --nodeadd testdrive).