You’re getting another X11 session instead of the console session.
IIRC, you can set up X11vnc on the system and connect it to the :0 display, then direct xrdp to use x11vnc as the backend. Then when you connect, it grabs that vnc session and translates it to rdp protocol. I’m not sure if that’s still viable.
LMstudio usually lists the memory recommendations for the model.