Hi @jsdwr,
Thank you for posting in this community.
First of all, the conditional access policies you set may take effect after 24 hours. You can confirm that the time of your test is 24 hours after the setup is complete.
Second, according to the document you shared, the conditional access policies only take effect when you use unmanaged devices for people who are not in your organization. Confirm that your testers are not part of the organization at the time.
Finally, if your policy of access from unmanaged devices wants to apply to all users, I recommend that you implement sensitive labels and Microsoft Entra Conditional Access: Use sensitivity labels to protect content in Microsoft Teams, Microsoft 365 groups, and SharePoint sites.
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