It looks like the installer is expecting to be run only in the context of a logged-on user – it's trying to create per-user shortcuts. That's failing, because it isn't being run interactively by the LCM. The LCM isn't a "user." Looks like your guess was correct.
The installation may have been successful in every way that counts, but because the installer is returning an error code, the LCM doesn't know it all went fine.