Local password doesn't meet policy requirements

A few of our users are getting this notification when they try to set a password with the requirements already being met. The solution oddly enough is to rebind the machine to AD. Then it works fine. Does anyone have an idea why this is the case?

I have no "PasswordPolicy" set in the settings.

All the effected machines are running 10.12.6.

I realize that NoMAD doesn't require machines be bound - and we will eventually get there.