OOBELOCAL error when disabling security questions for local accounts in local group policy - Win 11 24H2

Question

I've been creating a new golden image for a new model of system we are getting, when setting the Prevent the use of security questions for local accounts local group policy option in Computer Configuration\Administrative Templates\Windows Components\Credential User Interface, running sysprep (generalize and oobe), I'm consistently getting the OOBELOCAL error. Disabling the local GP option allows setup to continue.

I have also recreated this issue with a stock windows 11 Pro 24H2 install, entering OOBE, opening a command prompt with shift+10, set the registry option for the group policy option and rebooting, no other modifications to the stock UK image fresh from the media creation tool.

For more context, we don't have any AD or Azure AD, and use local accounts for all staff. The security questions are not appropriate for our environment, hence my attempt to disable them.

I have attempted to bypass the OOBE in my unattend.xml file, however this has not worked for me

Has anyone overcome this issue? I have spotted a few other posts from around 2023 but no obvious solution.