ASC does run Providex so It will use a license.  You will need to close the PVXwin32 sessions from task manager
Try running pvxwin32.exe on server and see if same message.  
If it launches, you can check User License typing
? TCB(23) =Total License
? TCB(24) = Available 
You can confirm what is showing is what the customer has purchased.  Remember the Total License will include the +2.  Customer purchased 10, Total License = 12 for ADV and PREM
See Solution ID: 223924550036278
Hope this helps.  

When the Sage 100 Application Server is run as a ‘Service’, opening the Application Server Configuration uses a license. However, if it’s run as an 'Application,' it does not.    

Thanks Ronnie and Nate;

Much appreciated. Of course what would really be good is if, when a situation like this occurs where all the licenses are in use, if there was some way for someone else to run both Master Console and App Serv Config (even if Sage is running as a service). But I guess that's not in the cards. I did put an idea on the Sage 100 Ideas site, just in case this grows legs and becomes popular.

Last question: was this changed since I worked back at 56 Technology for Best Software? I could swear it was not the case back then, but that was a long time ago.

Thanks again, guys - you both are awesome