@andrew502: How did you came to this conclusion? Do you have problems with % in the banner? Can you post session log file with and without % in the banner?

Is anyone able to verify if removing the % from the login banner allows the login? I think WinSCP doesn't like default login banner. Any servers we removed this from seemed to work.

In the context of WinSCP connection, the remote is the server you are connecting to with WinSCP.

GlobalSCAPE server is SFTP server software.

I do not know what needs to be fixed. That's what I wanted to identify by doing some tests against the server.

Yes, possibly, but I am still not sure which server is the "remote side".

Is the "remote side" the server (at the remote location that I have the credentials to connect to) from my SFTP server (my side is actually a Windows 10 PC)? I assume this is correct, but not sure, just need some clarification.

What would be the definition of a GlobalSCAPE server? Is the software version, hardware, other?
What needs to be fixed on their end or mine?

The "remote side" is the server.
It is a known issue with GlobalSCAPE servers:
Issue 2159 – Spurious "Remote side sent disconnect message: type 11 (by application)" when connecting to GlobalSCAPE server
Any chance of getting a test account on your server?

Curious where the issue is at, if it is on the receiving SFTP server or my side running the WinSCP program. After receiving multiple

Waiting for the server to continue with the initialization

I receive a

Remote side sent disconnect message
type 11

as you can see in the log file attached to this message. Here again I am not sure if my WinSCP is considered the "remote side" or the SFTP I am trying to connect to. Please clarify and also, what I need to do to fix the connection.