OK so where things have been left is that PsExec v2.32, which is the current/new release, will work the same as previous versions of PsExec, when using SYSTEM remote execution context. However, when using ‘Elevated token’ in conjunction with alternate credentials in PsExec v2.32, you also have to now additionally use the -i (interactive) switch. In the next release of BP we will add this option as well.
Microsoft appears to be considering this change intentional, and not due to a bug after all. It’s unclear at this time if they will be making any additional changes in the near future, but all signs point to this being where things will be left, at least for now. It does not appear that they plan to release an update to replace v2.32 any time in the very near future.