Hi @Yordan Yordanov ,
The "Unlock account without resetting the password" option under password reset blade is for On-premises accounts only. What this option does is it sets the value of badPwdCount attribute to 0.
For instance, if you have account lockout threshold set to 5 in on-prem AD, the value of badPwdCount will increase with each invalid logon attempt and it cannot go beyond 5. At 6th invalid login attempt user will get "Your account is locked out" message.
When the user unlocks the account using SSPR portal, the value of badPwdCount attribute is set to 0 in On-premise AD and user account is unlocked in on-prem AD. This setting doesn't change anything for the cloud user object. In fact, if you go to https://aka.ms/sspr and login with cloud only user, you will not even get the "Unlock account without resetting the password" option. This is why this option is provided under Password reset > On-premises integration.
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