As an addendum, I tried creating the customization specification from scratch in the build script. So instead of having a template spec, and creating a non-persistent spec from that template, I just created all new - something like this:
New-OSCustomizationSpec -AdminPassword <local admin PW> `
-ChangeSid: $true `
-Description $newVM `
-Domain $sDomain `
-DomainCredentials $creds `
-FullName <DOMAIN> `
-GuiRunOnce <Run Once Command> `
-LicenseMaxConnections 5 `
-LicenseMode PerServer `
-Name $newVM `
-OrgName <DOMAIN> `
-OSType: Windows `
-Server $vCenter `
-TimeZone 035 `
-Type Persistent `
-ErrorAction Stop
This seems to work just fine, and I do not get any errors. Just do not understand why, even creating a new template spec, it seems not to like the encryption key.