yes, you are correct, if your credentials are configured as "email@example.com", currently the Royal Server will automatically convert them to "domain\username". I have spoke to the Royal Server programmer about this issue, and it is on our "to-do" list. Unfortunately, I can't give you an E.T.A yet on when it will be implemented.
It seems that Royal Server only accept a username of the form DOMAIN\username.
If you have configured a credential using your UPN (like firstname.lastname@example.org), or just your username, it is unusable to authenticate against RoyalServer.
Is there a plan to update the RoyalServer authentication mechanism to act like RoyalTS with the option "Omit Domain" and match on users in the "Royal Server Users" with there sAMAccountName ou their UPN in case it contain '@' ?