In order for the Logon as current user feature to work, Horizon 7 must provide the Connection Server's Server Principal Name (Windows identity) to connecting clients prior to user authentication.
This information is withheld by default but can be provided by enabling the Accept logon as current user setting in Horizon Administrator. This choice is made individually for each server. If not enabled for a given server, then users logging in to that server from Horizon Client for Windows are required to enter credentials, even if they have enabled the Logon as current user setting. When deciding whether to enable the Accept logon as current user setting for a server, consider whether connecting clients are on an internal network, and therefore somewhat under your control, or external network, and hence uncontrolled.
The Hide server information in client user interface setting affects the client's user interface only, it doesn't change what information the server provides to the client. This setting is disabled by default.