Once in a while you can bump into a warning from K2 Setup Manager which says: “The selected user needs to have Domain Users privileges to proceed” on K2 Site Application Pool Configuration which looks as shown below:
I was not able to confirm what exactly triggers this, but I do know that it happens while specified user in fact has Domain User group membership and I saw it with both K2 4.6.x and K2 Five installers. Good news that bypass this blocking warning is easy – you just need to edit Product.config file in your installation directory and set domainusercheck value to false as shown below:
You will need to restart K2 Setup Manager after saving this change and you should be able to proceed without receiving any any warnings.