Microsoft update KB3023607 is causing issues with Anyconnect clients (confirmed v3.x and v4.x) on Windows 8.1 machines. The error indicates “Failed to initialize connection subsystem.”
The workaround is to run the vpnui.exe in Windows 8 compatibility mode or uninstall KB3023607 until Microsoft (or Cisco) release a patch.
Props to Josh Zheng for identifying the problem and finding the workaround!