I tried creating a login called 'test' and password 'test', with option 'enforce password policy' checked. The login creation fails because the password does not meet complexity which
is understandable.
Now, try creating the login with the option 'enforce password policy' unchecked, the login gets created. If I try to edit the properties of login 'test' now, and check the option 'enforce
password policy' and click OK, the operation is successful. Here the password is not checked for password complexity when the 'enforce password policy' option is enabled.
Now that the edit operation is successful, we have a login that has the option 'enable password policy' checked but with a weak password, isn't that a bug?
I submitted a bug report to microsoft as well
https://connect.microsoft.com/SQLServer/feedback/details/791690/enforce-password-policy-does-not-check-for-password-complexity-when-editing-the-properties-of-a-login#details
Please let me know if this bug is already a known issue and if there is a solution for this.
