This is a known issue resolved in 2016.3 SU4 and 2017.1 SU1. Fixing it does require updating the agent.
For your reference, the defect # for this is 402828.
With regards to an agent setting, this is due to software monitoring also tracking files executed from a network drive. This then tells the inventory scanner it should go scan those. You can stop this by turning off software monitoring in your agent inventory settings, and disabling the software monitoring service on the agents. However, that's a pretty nuclear option, and will result in your software usage counts being wrong. Your best bet is to update the Core and then update your agents.
The current SU for 2017.1 is SU2, which also contains the fix.