Confirmed that the issue is the template, and not the acad.exe.Config file, as I've restored Kean's configuration to allow remote sources, and get same results as above.
I agree that one should have a QNEW specified, but unfortunately there seems to be a distinction between even which template is used as a starting point for one's corporate template. For example, I opened acad.dwt, added a new surface style, then attempt CreatedByUpdate and still result in fatal error.
I am beginning to suspect that the corporate template was started by acad.dwt and not the NCS template (which is odd, given that we're NCS based, but still). I need to try to pinpoint what about any given template would cause this... that may be asking too much. LoL