New WebServer Instance 2017 error

Hi,
I have a problem adding a new webserver instance. I am using the powershell command,

(PS C:\WINDOWS\system32> New-NAVWebServerInstance -WebServerInstance DynamicsNAVTEST –Server TEST –ServerInstance DynamicsNAV100TEST -ClientServicesCredentialType Windows)

but I am getting the following error:

New-NAVWebServerInstance : ClientServicesCredentialType 'Windows' is not compatible with Web Client authentication mode in use: 'Windows'

In Dynamics NAV Administration in General Tab I have already selected 'Windows' as my Credential Type. Also in config file ClientUserSettings.config and in web.config (in C:\inetpub\wwwroot) the credential type is set to Windows
( <add key="ClientServicesCredentialType" value="Windows"/>).

I am running out of ideas what to do. Did anyone of you face the same problem?
I will appreciate any tips!