Microsoft confirms Patch Tuesday breaks Local Account log-in on Windows 11 and 10

Microsoft has confirmed an issue on Windows 11 and Windows 10 caused by this month's Patch Tuesday updates. The issue, Microsoft explains, is associated with the local account. When a user installs the Patch Tuesday updates (Windows 11, Windows 10) and logs in using a local user account, a message is displayed on both Windows 10 and Windows 11 that states that "Your data will be processed outside of your country or region". The bug does not affect all client devices and is only an issue on Education and Enterprise versions of Windows 11 and Windows 10.

The Microsoft support article regarding this issue notes the following:

Symptoms

A notice is displayed that informs users about the transfer of data outside China after installing a Windows 10 or Windows 11 update that is dated on or after March 21, 2023.

Alongside this notice, a Microsoft Privacy statement dialog box is also shown. The Redmond firm has provided steps to work around the issue. They are given below:

We are aware that the notice is shown to users who log on to a device that is running Enterprise or Education versions of Windows 10 or Windows 11 by using a local user account. If an Enterprise wants to suppress this notice, implement the following workaround.

1. Before you apply a Windows update dated on or after March 21, 2023, create the following registry entry on the Windows 10 or Windows 11 device for each local account.

   Registry location	HKEY_CURRENT_USER\SOFTWARE\Microsoft\Windows\ CurrentVersion\CloudExperienceHost\Intent\ PersonalDataExport
   Value name	PDEShown
   Data type	REG_DWORD
   Data value	1

2. Then apply the applicable Windows updates dated on or after March 21, 2023 and then restart the device.

You can find more details on Microsoft's support article (KB5026964) here.