[Android Software Development] stankyou:
I tested that on my work computer. I'll try and replicate it on my home pc and paste a log again. And if its gonna be a slow Monday for me I'll get a log from work pc too. Thanks for looking into this.

via xda app

Edit/Update:

So I just came from a fresh flash of the same nightlies I was having issues last time. I am happy to say that it now works fine on v3.9beta. Weird. Anyway, my guess is that the USB debugging authorizations on the developer settings may have something to do with my issue last time. When I tested my connection today to get a log, it prompted me to allow the connection first. Something I didn't get from the previous procedure I did. So revoking USB debug authorizations and re-allowing it would probably help for anyone having issues connecting with roms running JB4.3

Update:

Looks like it's intremittent. I disconnected and reconnected again and it failed. I was not able to re-establish a connection again. Here's the log.

08-26 11:51:51:945 W/I Tool version : 3.9

08-26 11:51:51:945 W/I adb.exe

08-26 11:51:51:945 W/I aapt.exe

08-26 11:51:52:086 W/I Android Debug Bridge version 1.0.31

08-26 11:51:52:242 W/I Log clear started

08-26 11:51:52:336 W/I Log Clear Done. Start log

08-26 11:51:55:101 W/I ==> Start android service

08-26 11:51:55:914 L/I Reverse tethering started. Process id is 8819

08-26 23:51:55.06 A/I SocketService.onStartCommand. Action = TTServiceStart

08-26 23:51:55.06 A/I TunnelController : thread started

08-26 23:51:55.06 A/I UsbThread9 : thread started

08-26 23:51:55.06 A/I UsbThread9 : Create usb socket

08-26 23:51:55.07 A/I UsbThread9 : usbServerSocket : Waiting for the host to connect

08-26 11:51:56:054 W/I Wait service. If nothing happens now, close the program and retry

08-26 11:51:56:601 W/I Waiting for connection. If nothing happens now, close the program and retry

08-26 23:51:55.78 A/I UsbThread9 : Host connected

08-26 11:51:57:085 W/I Check connection 2 ok

08-26 11:51:57:085 W/I Android service status : Host connected

08-26 11:51:57:179 W/D ------------------------------------------------------------

08-26 11:51:57:179 W/D Android Superuser may ask you to accept rights.

08-26 11:51:57:179 W/D Check your android and accept "Superuser Request" now if needed !!!

08-26 11:51:57:179 W/D If connection stop here and Superuser don't apears ,you phone or tablet is probably not rooted

08-26 23:51:56.36 A/I RELEASE : 4.3

08-26 23:51:56.36 A/I INCREMENTAL : eng.jenkins.20130824.050631

08-26 23:51:56.36 A/I SDK : 18

08-26 11:51:58:460 W/I interfaces before script startrev_rmnet7(DOWN), rev_rmnet6(DOWN), rev_rmnet5(DOWN), rev_rmnet4(DOWN), rev_rmnet3(DOWN), rev_rmnet2(DOWN), rev_rmnet8(DOWN), rev_rmnet1(DOWN), rev_rmnet0(DOWN), rmnet1(DOWN), rmnet0(DOWN), rmnet7(DOWN), rmnet6(DOWN), rmnet5(DOWN), rmnet4(DOWN), rmnet3(DOWN), rmnet2(DOWN), rmnet_smux0(DOWN), rmnet_usb0(DOWN), rmnet_usb3(DOWN), rmnet_usb2(DOWN), rmnet_usb1(DOWN), lo(UP) 127.0.0.1/8, sit0(DOWN) 192.168.1.2/24, p2p0(UP), wlan0(UP), dummy0(DOWN)

08-26 11:51:58:742 W/I no route

08-26 23:51:57.92 A/D OnStart script

08-26 23:51:57.92 A/D wifi or 3g card adress : "0.0.0.0/0"

08-26 23:51:57.92 A/D Interface to use : "sit0"

08-26 23:51:57.93 A/D Old routes adress to disable : ""

08-26 23:51:57.93 A/D default route to restore : ""

08-26 23:51:58.02 A/V stdout null, is your android rooted ?

08-26 23:51:58.02 A/D adress to use : "192.168.1.2"

08-26 23:51:58.02 A/D nativeUdp : "false"

08-26 23:51:58.02 A/D Create TETHER chain and Clean...

08-26 23:51:58.45 A/D ICMP...

08-26 23:51:58.84 A/D busybox ifconfig sit0 up

08-26 23:51:58.95 A/D ifconfig sit0 192.168.1.2 netmask 255.255.255.0

08-26 23:51:59.07 A/D no default route to delete

08-26 23:51:59.07 A/D route add default gateway 192.168.1.2 sit0

08-26 23:51:59.15 A/D setprop dns and ip

08-26 23:52:00.79 A/D redirect all communications to TETHER chain

08-26 23:52:00.99 A/D forward tcp to native handler

08-26 23:52:01.30 A/D forward udp to redsocks

08-26 23:52:01.54 A/V stdout null, is your android rooted ?

08-26 23:52:01.54 A/D OnStart script done

08-26 23:52:01.54 A/I UsbThread9 : runGlobalScriptStart : script GlobalScriptStart done

08-26 23:52:01.54 A/I UsbThread9 : Api.nativeTcpSockets : null

08-26 23:52:01.54 A/I UsbThread9 : Api.nativeUdpSockets : null

08-26 23:52:01.54 A/I UsbThread9 : Api.nativeDnsSockets : null

08-26 23:52:01.68 A/I mainTcpServerLoop()

08-26 23:52:01.68 A/V cppMainTcpServerLoop : started

08-26 23:52:01.87 A/I UsbThread9 : call HcActivateFakeWifi intent

08-26 23:52:01.88 A/I UsbThread9 : after HcActivateFakeWifi intent

08-26 23:52:01.88 A/I UsbThread9 : runGlobalScriptStart done

08-26 11:52:03:476 W/I interfaces after script startrev_rmnet7(DOWN), rev_rmnet6(DOWN), rev_rmnet5(DOWN), rev_rmnet4(DOWN), rev_rmnet3(DOWN), rev_rmnet2(DOWN), rev_rmnet8(DOWN), rev_rmnet1(DOWN), rev_rmnet0(DOWN), rmnet1(DOWN), rmnet0(DOWN), rmnet7(DOWN), rmnet6(DOWN), rmnet5(DOWN), rmnet4(DOWN), rmnet3(DOWN), rmnet2(DOWN), rmnet_smux0(DOWN), rmnet_usb0(DOWN), rmnet_usb3(DOWN), rmnet_usb2(DOWN), rmnet_usb1(DOWN), lo(UP) 127.0.0.1/8, sit0(UP) 192.168.1.2/24, p2p0(UP), wlan0(UP), dummy0(DOWN)

08-26 11:52:03:741 W/I route : destination : 0.0.0.0, gateway : 192.168.1.2, output : sit0

08-26 11:52:03:741 W/I route : destination : 192.168.1.0, gateway : 0.0.0.0, output : sit0

08-26 11:52:03:741 W/I

08-26 11:52:03:741 W/I Connection done

08-26 23:52:04.87 A/I =====HcActivateFakeWifi==========

Server List

DNS List

10.218.99.10[default]

10.218.100.52