Although they are quite old, here are a couple of different Microsoft hotfixes for issues with this particular group policy setting not applying correctly in Windows 7 or Windows Server 2008. Not sure if they apply in your case, but here they are:
Although they are quite old, here are a couple of different Microsoft hotfixes for issues with this particular group policy setting not applying correctly in Windows 7 or Windows Server 2008. Not sure if they apply in your case, but here they are: