When you start a Terminal Services session with a local printer, a redirected print queue is created in the Terminal Services session. All of your settings should be transfer over to the redirected printer, but that is not the case all the time. Some printing models do not support detecting changes to the Device Settings tab for each redirected printer.
The solution is to make the desired change in the Device Settings tab and then change a different setting in another tab, then hit Apply. This is all done inside the terminal session.