Even though I was able to set the file association on the current session, it was gone whenever the user logged off and back on.
A solution here was GPO, allthough the usual “Computer Configuration/Preferences/Control Panel Settings/Folder Options” did not work in this case.
Instead I used DISM to grab a baseline of the default file associations on the server:
Dism /Online /Export-DefaultAppAssociations:\\Server\Share\AppAssoc.xml
-Edit the file as needed, store the XML file locally on the terminal server, preferrably Windows\system32 folder, with appropriate permissions.
-Assign the following Group Policy to the servers OU:
“Computer Configuration/Policies/Administrative Templates/Windows Components/File Explorer/Policy/Set a Default Associations Configuration File/”
Specify your local XML file.
File Association case closed 🙂