Based on my detailed understanding of how the Client Encryption library has been coded, and how it uses the Kerberos protocol, I think you will find that the SAP Client Encryption library won't allow you to configure encryption without any domain trust. However, you are welcome to try... I think you will have to go with a licensed SNC library that supports the functionality you require. You can then benefit from users having less passwords as well as having an encrypted DIAG protocol.
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