Symptoms

People picker resoling user names as System.Bytee]
 

Diagnoses

The K2 people picker in K2 Workspace isn’t resolving users correctly. When searching on a user name it always returns ‘System.Bytem]’ and adding this entry does not grant the correct user access (it adds DomainSystem.Bytet]).

The issue can be reproduced on our TEST environment by navigating to K2 Workspace > Workflow Server > Server Rights > Add. The same problem occurs when attempting to change permissions on the Process Rights page for a workflow.
 

Resolution

I have seen this happen before when a multi domain configuration was not done correctly.
Please advise if you have a multi domain configuration on your end.

If you do please ensure that everything is setup as per the following article.
http://help.k2.com/onlinehelp/k2blackpearl/icg/4.6.5/webframe.html_after_addingmultipledomains.html

The most common thing missed is the bottom section
Modifying the Workspace Web Site
Ensure that both those entries are added and correctly added(with the correct LDAP)

Ensuring that the ADConnection Strings are setup and added correctly should resolve this issue