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Tested this on a few devices, the policies do apply after the device policy sync happens. If you manually initiate the sync via company portal it will push the HKCU registry values down for the deleted user.
You might have some other conflict or configuration deviation. Devices I tested either had OEM ready image or Win11 pro consumer ISO from Microsoft.
Thanks for responding. When you say "after the device sync happens", do you mean within 8 hours (default sync/policy refresh time) or only after you have done a manual sync? I've tested this in two separate environments and have the same issue.