This policy setting allows you to require users to set a password on the device. If you enable this policy setting, users ...

"This policy setting allows you to require users to set a password on the device.  If you enable this policy setting, users are required to create a password on their devices.  If you disable this policy setting, users can disable their password through the control panel, and not lock their phones. However, users are not notified that the policy is disabled.  If you do not configure this policy setting, then existing password-related settings on the device remain in effect."
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