This has to do with CloudLinux LVE for this particular server. Our test server in Lab that has CL LVE does not exhibit the problem.
strace shows that when lscgid (handles /cpanel cgi redirect) crashed when enter LVE. Hence 500 error. If CloudLinux is set to Disabled in LSWS (Admin Console => Configuration => Server => General), 500 error is gone. 500 error re-appears when set to LVE.
More to come.