UPDATE: In the meantime, I've set Password protect the screen saver to Not configured and Prevent changing screen saver to Enabled. I'm still unable to determine why setting Password protect the screen saver to Disabled actually causes the feature to be Enabled.
The following group policy is being applied to a specific computer:
Computer Policy
Copy customscreensaver.scr from a network share to C:\Windows\System32\customscreensaver.scr
Enable loopback processing mode – Merge
User Policy
Enable Screen Saver – Enabled
Force Specific Screen Saver – Enabled customscreensaver.scr
Password protect the screen saver – Disabled
Screen Saver Timeout – 60
The file copy is working fine. Typing customscreensaver.scr in the run prompt runs the screen saver. However, the computer is not obeying the . The screensaver runs after 60 seconds even if the timeout is set to 1+ minutes. The screen locks after the screensaver exits despite that option being disabled. Finally going to the screensaver properties shows "Password protect the screensaver" being checked but disabled.
Expected Result: Custom screen saver runs after 60 seconds. Windows does not lock the workstation after exiting the screen saver.
Actual Result: Screen saver runs after a random amount of time (HKCU\Control Panel\Desktop\ScreenSaveTimeOut is set to 2700 still from the previous policies 45 minute timer.), ends up password protecting the screensaver despite Password Protect the Screen Saver policy being set to Disabled.
Windows 7 Professional (x64) Workstation
Domain Function Level is 2003
Using RSOP.msc or gpresult shows that the above policies are in fact being applied to the workstation.
Best Answer
As it turns out there were two conflicting policies being applied to the system. My account was not affected by one of the policies so everything seemed to work fine for me, however when any other user account tried (because those accounts were being affected by the other policy) the screensaver policy was overwritten with the policy that caused what I posted as the "Actual Result".
Unfortunately that other policy is a very restrictive policy so we couldn't access
gpresultorrsopto figure this out sooner. Using Group Policy Results helped us figure it out.