[MC-118391] Crafting not working when running as non-administrator (Server)

When running a minecraft server on Windows as a user with privileges limited to only the users minecraft folder, minecraft will not allow crafting. Crafting book is empty.

If I run the Minecraft server as an administrator, there is no problem however this is a huge security risk since I run multiple servers for different users.

This only impacts Minecraft version 1.12
1.11.2 and lower versions are not impacted.

Reading from the console, I can see the following error messages which states that its attempting to access a file which might be outside the game server's folder (please see attached). The question is, where is it trying to access the file? Why the change?

8/06/2017 7:58 AM: [MC]: java.nio.file.AccessDeniedException: C:\GAME SERVERS\ultramoo mct 9\minecraft_server.jar
8/06/2017 7:58 AM: [MC]: 	at sun.nio.fs.WindowsException.translateToIOException(WindowsException.java:83) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at sun.nio.fs.WindowsException.rethrowAsIOException(WindowsException.java:90) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at sun.nio.fs.WindowsLinkSupport.getRealPath(WindowsLinkSupport.java:259) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at sun.nio.fs.WindowsPath.toRealPath(WindowsPath.java:836) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at sun.nio.fs.WindowsPath.toRealPath(WindowsPath.java:44) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at com.sun.nio.zipfs.ZipFileSystemProvider.newFileSystem(ZipFileSystemProvider.java:111) ~[zipfs.jar:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at java.nio.file.FileSystems.newFileSystem(FileSystems.java:326) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at java.nio.file.FileSystems.newFileSystem(FileSystems.java:276) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at aks.b(SourceFile:77) [minecraft_server.jar:?]
8/06/2017 7:58 AM: [MC]: 	at aks.a(SourceFile:55) [minecraft_server.jar:?]
8/06/2017 7:58 AM: [MC]: 	at ng.c(SourceFile:485) [minecraft_server.jar:?]
8/06/2017 7:58 AM: [MC]: 	at net.minecraft.server.MinecraftServer.main(SourceFile:672) [minecraft_server.jar:?]

8/06/2017 7:58 AM: [MC]: java.nio.file.AccessDeniedException: C:\GAME SERVERS\ultramoo mct 9\minecraft_server.jar
8/06/2017 7:58 AM: [MC]: 	at sun.nio.fs.WindowsException.translateToIOException(WindowsException.java:83) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at sun.nio.fs.WindowsException.rethrowAsIOException(WindowsException.java:90) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at sun.nio.fs.WindowsLinkSupport.getRealPath(WindowsLinkSupport.java:259) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at sun.nio.fs.WindowsPath.toRealPath(WindowsPath.java:836) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at sun.nio.fs.WindowsPath.toRealPath(WindowsPath.java:44) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at com.sun.nio.zipfs.ZipFileSystemProvider.newFileSystem(ZipFileSystemProvider.java:111) ~[zipfs.jar:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at java.nio.file.FileSystems.newFileSystem(FileSystems.java:326) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at java.nio.file.FileSystems.newFileSystem(FileSystems.java:276) ~[?:1.8.0_111]
8/06/2017 7:58 AM: [MC]: 	at nq.a(SourceFile:133) [minecraft_server.jar:?]
8/06/2017 7:58 AM: [MC]: 	at nq.a(SourceFile:73) [minecraft_server.jar:?]
8/06/2017 7:58 AM: [MC]: 	at nq.<init>(SourceFile:66) [minecraft_server.jar:?]
8/06/2017 7:58 AM: [MC]: 	at om.b(SourceFile:163) [minecraft_server.jar:?]
8/06/2017 7:58 AM: [MC]: 	at net.minecraft.server.MinecraftServer.a(SourceFile:281) [minecraft_server.jar:?]
8/06/2017 7:58 AM: [MC]: 	at nx.j(SourceFile:230) [minecraft_server.jar:?]
8/06/2017 7:58 AM: [MC]: 	at net.minecraft.server.MinecraftServer.run(SourceFile:434) [minecraft_server.jar:?]
8/06/2017 7:58 AM: [MC]: 	at java.lang.Thread.run(Thread.java:745) [?:1.8.0_111]