When choosing to install License server only as part of the main Setup.exe, i.e. unselecting all services including the WCF services and selecting only the License service, you are prompted to install IIS to continue the installation.
This is a defect as IIS is not a requirement for the License server install therefore is not required.
As a workaround it is possible to install by running KSALicServerSetup.exe directly from licensing folder.
This will be addressed in 7.10.