This policy setting allows the administrator to exclude the specified credential providers from use during authentication. ...

This policy setting allows the administrator to exclude the specified
credential providers from use during authentication.

Note: credential providers are used to process and validate user
credentials during logon or when authentication is required.
Windows Vista provides two default credential providers:
Password and Smart Card. An administrator can install additional
credential providers for different sets of credentials
(for example, to support biometric authentication).

If you enable this policy, an administrator can specify the CLSIDs
of the credential providers to exclude from the set of installed
credential providers available for authentication purposes.

If you disable or do not configure this policy, all installed and otherwise enabled credential providers are available for authentication purposes.