@Giuliano , Thanks for posting in our Q&A. In the CSP description, it mentioned that this is only for a new local user account. which means we can use it with "./Device/Vendor/MSFT/Accounts/Users/UserName" when we create a new local user.
https://learn.microsoft.com/en-us/windows/client-management/mdm/accounts-csp
Your understanding is correct. We can create a new local admin account as a workaround. Or we can deploy a PowerShell script to change the local user password. Here the commands we can try
Note: Please change the password value you want.
$Password = ConvertTo-SecureString "Password value" -AsPlainText -Force
$UserAccount = Get-LocalUser -Name "admin"
$UserAccount | Set-LocalUser -Password $Password
Edit with the commands test.
Hope it can help.
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