Confirmed with Microsoft Windows Server 2012 R2 & 2016
Microsoft Windows Server 2012 R2 - Direct Link to Update kb4041685
Microsoft Windows Server 2016 - Direct Link to Update kb4041688
Microsoft windows server 2012 R2 and 2016 do not natively support LTO-8 unless they are patched. This issue may be present in other versions of Windows and Windows Server. Try updating Windows if you experience issues.
Microsoft Windows Server 2019 and above should support LTO-8 out of the box.
Special thanks to a helpful customer.