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Windows Server 2016 (1607) docker hello-world image pull fail

Expected behavior

In an elevated Powershell I run:
docker container run hello-world:nanoserver

I expect:
The hello-world image to download, extract and show in Powershell

Actual behavior

I get the following error:
Unable to find image ‘hello-world:nanoserver’ locally
nanoserver: Pulling from library/hello-world
e46172273a4e: Extracting [==========================================>] 92.82MB/92.82MB
14d968660b11: Download complete
c3fd826897a1: Download complete
dd4768c64881: Download complete
C:\Program Files\Docker\docker.exe: failed to register layer: re-exec error: exit status 1: output: ProcessUtilityVMImage \?\C:\ProgramData\docker\windowsfilter\46649310ad9db6344edd1a07dab6bdaa3e81270ac73a51c02ad20da4164baa52\UtilityVM: The system cannot find the path specified.
See ‘C:\Program Files\Docker\docker.exe run --help’.

Information

  1. I get this error on a fresh Windows Server 2016 install. (version 1607) (OS build 14393.2906)
  2. Windows Containers feature is enabled via elevated Powershell.
  3. Firewall has been disabled and Anti-virus not installed. (This was my first troubleshoot)
  4. As the image is being pulled I can see it in the C:\ProgramData\docker\windowsfilter file but just before it finishes the image disappears.

Docker version:
Engine:
Version: 17.06.2-ee-21
API version: 1.30 (minimum version 1.24)
Go version: go1.10.8
Git commit: 85d680a
Built: Thu Apr 11 06:13:02 2019
OS/Arch: windows/amd64
Experimental: false