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Why is "Install Updates and Shutdown" not working?

There appears to be a discrepancy in how the settings are documented. The documentation reports that if the settings are "Not Configured" or "Disabled", then the AU client considers them as disabled and behaves accordingly.

In my tests and observations this is an incorrect statement. In fact, if the settings are "Not Configured" then the AU client does not enable the facility at the client at all.

I changed the settings from "Not Configured" to "Disabled", and with the download of the WI v3.1 beta, I was presented with the "Install Updates and Shutdown" option as my default shutdown option.

So, for those wishing to make use of the "Install Updates and Shutdown" option, you will need to explicitly mark those policy settings as "Disabled" for them to function at the client.