Windows 2003 Terminal Server doesn't decrement Per User license count

This had me going for a while so thought I'd post about it here. I was asked to add some more licenses to one of our Terminal Services and decided to check Terminal Services Licensing Manager (licmgr) to double check the current license situation. There are 5 terminal services Per User licenses but I noticed that the number issued was 0.

At the time there were 5 users connected so I decided to make another connection and I was allowed to exceed the number of licenses! I didn't think this was possible and it wasn't anything I'd really paid attention to. However after looking over at Microsoft's support site I found this:

Currently, Windows Server 2003 does not manage User CALs. This means that even though there is a User CAL in the license server database, the User CAL will not be decremented when it is used. This does not remove administrators from End User License Agreement (EULA) requirements to have a valid terminal server (TS) CAL for each user. Failure to have a User CAL for each user, if Device CALs are not being used, is a violation of the EULA.

It appears this is by design, which is something to be aware of if you're expecting Windows to alert you about any license shortfalls.