Previously, after setting up Windows for an Azure AD user, it would give me a prompt saying that my organization requires a PIN for Windows Hello. I would hit next, then close the dialog asking for the PIN, and it would say there was an error or something, I'd hit OK and I'd be in Windows with no further Windows Hello harassment until I restarted. Once I got the device enrolled in Intune, it would apply the policy I have a policy that disables Windows Hello.
However, a recent update to Windows seems to have made it impossible to bypass setting up a PIN. Because I can't enroll the device in Intune during the Windows Setup, the disable policy doesn't apply until after the PIN is established on the account. Once the PIN is set up on a Windows Account, it is not removed when Windows Hello is disabled via Intune/GPO, and it is seemingly impossible to remove manually. The only lead I've been able to find is to delete this folder: C:\Windows\ServiceProfiles\LocalService\AppData\Local\Microsoft\NGC\. However, Windows simply is not letting that happen, even after taking full ownership of the folder as a local admin.
My only workaround is to first setup the device authenticating with my own account which will have the PIN. Then enroll in Intune with the user's account to their policies applied and Hello disabled. Then create the local admin account. Then add the users account. Then log into the local admin account and delete my account. Finally, log into the users account to create shortcuts and do QA.
We use Bitlocker with a PIN that effectively does the same thing as Windows Hello with a PIN, except it also encrypts the disk. So I really don't see what it brings to the table besides a redundant password for users to memorize and extra help desk work when they forget it?
How do I get devices configured without adding a bunch of work to get around Windows Hello?
I am thinking about rolling out Azure AD to one of my client organizations and am curious about this, as well. Was a solution ever found? It already seems ridiculous you have to pay for Intune to be able to disable this, but if it's not even cleanly possible with Intune, this system sounds seriously flawed.