I'm not sure for 'out of date', but here is an explanation by MS
ESS can use only system DSN, so defining it on FMP (32bit app) we can select only 32bit DSN on local file
and only 64bit DSN on hosted on 64bit server file.
Yeah, something is wrong though. We found another VM was working as expected, so we're cloning that to replace the current machine that was having issues. I realize the ins and outs about FileMaker's ESS compatibilities, but it still doesn't really explain how switching settings in the system DSN caused it to fail.
Hopefully it will not be a recurring issue.