More info on this:
1. Install patch KB3135996v2
2. It breaks Responder
3. Follow this solution guide for the CLR20R3 error (yes, I know it's for Explorer, but it also works for Server): https://infrastructurecommunity.schneider-electric.com/docs/DOC-7232
4. Voila! Responder is fixed.
Arc/ArcFM have always been somewhat sensitive to .NET patches.
David, Thanks for sharing the fix.