Perhaps the application closes itself when hidden. Can you try to add it to all virtual desktops (make it sticky) and test if you still have the same behaviour while switching?

You can try too this...
Run the registry editor, go to the HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\R2d2KernelAuthority\Parameters key, edit the _NoCloseWhenHidden value and add your application file name (for example *\MyProgram.exe) (see the NoCloseWhenHidden value as template)

... or this...
Run the registry editor, go to the HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\R2d2KernelAuthority\Parameters key, edit the _NeverSubClassPrograms value and add your application file name (for example *\MyProgram.exe) (see the NeverSubClassPrograms value as template).

Let me know if you still have problems

<<Making it sticky helps, doesnt crash anymore, but is not the desired solution>>
This shows that the application probably closes itself when hidden. What are saying your developers?

<<Do i need to restart VDT or log off/log on in order to force reread of the registry settings?>>
You (unfortunately) must restart the computer

You can run the application in a non virtual desktop; doing so, the application is managed in another workspace and is not hidden when switching out. You can send me your application (support@R2d2-Software.com) if you want me to have a deeper look.