Kiosk accounts are always created in AD and never on the Connection Server itself.
"When you add a client in kiosk mode, View Manager creates a user account for the client in Active Directory.".
The command:
vdmadmin -Q -clientauth -add
just allows you to script the creation of these AD accounts with all the correct settings for kiosk mode and is provided as a convenient way to bulk add these accounts for all the kiosk mode client devices.
Mark.