Since custom logging configurations are pure XML files, many things can go wrong when editing such configuration files.
If the nlog.config file is somehow erroneous or cannot be read (e.g. due to file system permissions) the Application Server will switch to its default configuration and will write an entry to the Windows Event Log, telling you that there was a problem loading the custom configuration file.
If you need more detailed information why a custom log file could not be used by the Application Server you can use the command line switch -l to specify a file where the logging platform shall write more details.