It uses VLC from an actual VLC installation, so it searches the registry for a VLC installation to activate the plugin. The version of VLC you install must be of the same architecture as the architecture of OBS you're running (for example 64bit). So if you use 64bit OBS (which is default), you must download the 64bit version of VLC. Unfortunately, the 64bit version of VLC is not the default one they provide on their site, you have to navigate their website a bit to get the download for it. You could also just use the 32bit version of OBS as well, which is also installed and is in your start menu.
If you want the 64bit version of VLC, there's a little drop-menu arrow on the right side of the "Download VLC" button on their downloads page here:
https://www.videolan.org/vlc/download-windows.html
There it'll have an option to download the 64bit installer for VLC.
I could of course be mistaken in how Windows Server works -- perhaps it doesn't install with the same registry, but it shouldn't be doing that, so I'm assuming you may have just installed VLC 32bit by mistake.