The expectation that changing your Microsoft or Azure account password will immediately invalidate previous credentials, cutting off all unauthorized access, is deeply ingrained in modern digital hygiene. However, an in-depth look into Windows’ Remote Desktop Protocol (RDP) reveals a peculiarity that challenges this assumption and exposes millions of users—ranging from individuals at home to large enterprises—to lingering risk. Even after an account’s password has been revoked or updated, Windows’ RDP sometimes still allows the use of previous, now-invalid passwords to gain remote access to a machine, courtesy of a deliberately designed local credential caching system. Microsoft, for its part, does not classify this as a vulnerability, emphasizing its usability benefits, but security professionals remain concerned. This article investigates the technical, practical, and security implications of this controversial feature, drawing upon independent expert analysis and official statements.
At the heart of the matter lies the authentication process for RDP when used with Microsoft or Azure accounts. Unlike local accounts, which store credentials solely on the device, Microsoft- or Azure-linked Windows accounts rely on both cloud-based and local verification. After first successfully authenticating online, Windows stores a cryptographically protected version of the password on the local device. Subsequent login attempts—both local and over RDP—can then be authenticated using this cached credential, even if the device is offline or unable to contact Microsoft’s servers.
On the surface, this appears to be a win for usability and resilience. For instance, during network outages or extended periods of offline usage, users can reliably access their computers without cloud dependence. Microsoft’s official documentation now includes an explicit caution that, “when a user performs a local logon, their credentials are verified locally against a cached copy before being authenticated with an identity provider over the network… if the user changes their password in the cloud, the cached verifier is not updated, which means they can still access their local machine using their old password”. While this process is well-intentioned, it inadvertently carves out a risky loophole for remote access.
The situation becomes even more unpredictable when, according to Wade, “multiple older passwords might work while newer ones fail,” a behavior that some have observed but which remains poorly understood and not consistently reproducible. This adds confusion and increases the attack surface, as an attacker with any previously valid credential may persist in their access despite seemingly thorough remediation steps by the legitimate account holder.
A Microsoft spokesperson clarified to researchers that this system is “a design decision to ensure that at least one user account always has the ability to log in no matter how long a system has been offline.” Microsoft further noted that this issue had been reported previously by other researchers, and while a code change was considered, it was rejected for reasons relating to “compatibility with functionality used by many applications”.
From a risk management standpoint, this means that the “nuclear option” of password reset, often the first step following any account compromise, cannot be assumed to lock out attackers who may have previously obtained access through RDP. In any scenario where credentials were leaked—even if two-factor authentication, single sign-on, or additional cloud policies are now in place—the old password can act as a persistent skeleton key.
The problem is exacerbated by the fact that RDP usage is ubiquitous both in home settings and enterprise environments. A threat actor retaining RDP access with an old password might not trigger alerts in standard endpoint protection solutions, since from the OS’s perspective, the login is “legitimate” as it matches a locally cached, cryptographically verified password.
Will Dormann and others suggest one practical workaround: reconfigure RDP access so that only traditional, locally managed Windows accounts and passwords are accepted. By doing so, the cloud-tied caching mechanism is avoided, and credentials can be invalidated with immediate local effect. However, this mitigates usability for organizations relying on Microsoft 365/Azure ecosystem for unified login, device management, and user experience.
Another partial mitigation is to ensure affected devices are connected to the corporate network (via VPN or on-premise connectivity) and force a system-wide sign out or reboot after a password change. This prompts Windows to discard cached credentials and require updated authentication. However, policy enforcement for this is complex in decentralized, hybrid, or remote-first environments.
Users should be aware of which client they’re employing, as settings, cached data, and authentication paths may differ. The legacy client, embedded across all Windows installations, is the primary vector where the described password persistence behavior is observed.
What is clear is the latent risk in environments where credential hygiene is already under strain. Small businesses, which often rely on a combination of Microsoft accounts for device management and RDP for off-site access, are especially vulnerable. In hybrid work scenarios, family-shared devices, or cloud gaming setups, former users or family members may retain remote access capabilities long after their intended privileges should have expired.
Further, this approach minimizes support overhead for organizations with off-premises or frequently disconnected endpoints. The design effectively balances seamless usability with backwards compatibility across a range of application scenarios—a priority for a platform as widely deployed as Windows.
This is particularly problematic where users are unaware of the risk. Microsoft’s documentation and account management UX do not clearly communicate the nuances of local credential cache invalidation, nor provide tools to check or forcibly clear authentication tokens after a password change. In essence, the very feature designed to prevent accidental lockouts introduces a persistent, silent vulnerability that may never be detected until it is too late.
Others, referencing best practices from competing platforms (e.g., modern macOS or Linux environments), point to more immediate or granular invalidation mechanisms, such as expirable authentication tokens or forced device reauthentication upon credential rotation. Such approaches reduce usability friction but tip the balance toward security—arguably the correct default in today’s threat landscape.
At present, Microsoft has not announced plans to offer such features or address these concerns directly beyond the recent documentation change. Absent a technical fix, user education will remain the weakest link; unless administrators and home users are both aware of, and actively monitor for, the persistence of cached credentials, systems will remain at risk.
For now, users are left with limited technical recourse and a heavy reliance on procedural and policy controls to mitigate risk. The best defense is layered: minimizing RDP exposure, favoring local credentials where possible, and continually monitoring systems for unauthorized access.
Security researchers and advocates continue to work with vendors like Microsoft to close these legacy gaps. In the meantime, all users—novice and advanced alike—should view password hygiene not as a one-time fix, but as an ongoing, multi-layered practice. Only then can the promise of both usability and security in a remote, interconnected world be reconciled.
Source: WinBuzzer Windows Remote Desktop Protocol Allows Revoked Passwords; Microsoft Calls it a Feature - WinBuzzer
How Windows Remote Desktop Protocol Authentication Works
At the heart of the matter lies the authentication process for RDP when used with Microsoft or Azure accounts. Unlike local accounts, which store credentials solely on the device, Microsoft- or Azure-linked Windows accounts rely on both cloud-based and local verification. After first successfully authenticating online, Windows stores a cryptographically protected version of the password on the local device. Subsequent login attempts—both local and over RDP—can then be authenticated using this cached credential, even if the device is offline or unable to contact Microsoft’s servers.On the surface, this appears to be a win for usability and resilience. For instance, during network outages or extended periods of offline usage, users can reliably access their computers without cloud dependence. Microsoft’s official documentation now includes an explicit caution that, “when a user performs a local logon, their credentials are verified locally against a cached copy before being authenticated with an identity provider over the network… if the user changes their password in the cloud, the cached verifier is not updated, which means they can still access their local machine using their old password”. While this process is well-intentioned, it inadvertently carves out a risky loophole for remote access.
Revoked Passwords, Persistent Access
This authentication architecture was flagged recently by security researcher Daniel Wade and originally covered by Ars Technica and WinBuzzer. Wade describes the phenomenon as “a silent, remote backdoor into any system where the password was ever cached”—a characterization that resonated with many within the security community. The issue is not merely hypothetical: when a Microsoft or Azure password changes (for example, after a suspected compromise), the old password can often continue to unlock the PC via Remote Desktop, even from new devices and network locations, until a series of system-specific actions occur (such as a local sign-out and reauthentication).The situation becomes even more unpredictable when, according to Wade, “multiple older passwords might work while newer ones fail,” a behavior that some have observed but which remains poorly understood and not consistently reproducible. This adds confusion and increases the attack surface, as an attacker with any previously valid credential may persist in their access despite seemingly thorough remediation steps by the legitimate account holder.
Microsoft’s View: Usability Over Bulletproof Security
When confronted with concerns from Wade and other researchers, Microsoft clearly stated that they consider this password caching a feature, not a bug. Their communications emphasize the need for at least one user account on each PC to be accessible regardless of how long a device has been offline, which might be critical for organizations with distributed or seldom-connected hardware. The local caching mechanism thus ensures that, should internet connectivity be lost or cloud services go down, administrative access is still possible using the last-known-valid password for a given user.A Microsoft spokesperson clarified to researchers that this system is “a design decision to ensure that at least one user account always has the ability to log in no matter how long a system has been offline.” Microsoft further noted that this issue had been reported previously by other researchers, and while a code change was considered, it was rejected for reasons relating to “compatibility with functionality used by many applications”.
Security Experts Call for Rethink
The response from the information security community has been, at best, lukewarm—and often sharply critical. Will Dormann, a senior vulnerability analyst at Analygence, told reporters, “It doesn’t make sense from a security perspective… If I’m a sysadmin, I’d expect that the moment I change the password of an account, then that account’s old credentials cannot be used anywhere. But this is not the case.”From a risk management standpoint, this means that the “nuclear option” of password reset, often the first step following any account compromise, cannot be assumed to lock out attackers who may have previously obtained access through RDP. In any scenario where credentials were leaked—even if two-factor authentication, single sign-on, or additional cloud policies are now in place—the old password can act as a persistent skeleton key.
The problem is exacerbated by the fact that RDP usage is ubiquitous both in home settings and enterprise environments. A threat actor retaining RDP access with an old password might not trigger alerts in standard endpoint protection solutions, since from the OS’s perspective, the login is “legitimate” as it matches a locally cached, cryptographically verified password.
Mitigation Options: Limited and Inelegant
Microsoft’s public documentation update, prompted by Wade’s findings, explicitly warns of password caching in local and remote logon scenarios. Yet, the recommendation for addressing the associated risk is unsatisfying: there are no granular controls to force instant invalidation of cached credentials tied to Microsoft or Azure accounts short of disabling those forms of account integration altogether.Will Dormann and others suggest one practical workaround: reconfigure RDP access so that only traditional, locally managed Windows accounts and passwords are accepted. By doing so, the cloud-tied caching mechanism is avoided, and credentials can be invalidated with immediate local effect. However, this mitigates usability for organizations relying on Microsoft 365/Azure ecosystem for unified login, device management, and user experience.
Another partial mitigation is to ensure affected devices are connected to the corporate network (via VPN or on-premise connectivity) and force a system-wide sign out or reboot after a password change. This prompts Windows to discard cached credentials and require updated authentication. However, policy enforcement for this is complex in decentralized, hybrid, or remote-first environments.
The Broader Context: RDP Tools and App Confusion
Complicating matters is the coexistence of multiple RDP client tools in the Windows ecosystem. The “Remote Desktop Connection” client (mstsc.exe), bundled with Windows for decades, is distinct from the “Remote Desktop app” distributed through the Microsoft Store. In March 2025, Microsoft announced the retirement of the Store app (effective May 27, 2025), instructing users of cloud services such as Windows 365 or Azure Virtual Desktop to transition to the newer “Windows App” for remote scenarios. Importantly, this retirement does not impact the traditional RDP client, which retains the questionable password cache behavior discussed here.Users should be aware of which client they’re employing, as settings, cached data, and authentication paths may differ. The legacy client, embedded across all Windows installations, is the primary vector where the described password persistence behavior is observed.
Real-World Impact and Case Studies
Evidence of exploitation “in the wild” for this specific credential caching feature remains sparse and largely anecdotal. No large-scale attacks have been conclusively linked to this pathway, and there is no consensus among researchers about its active exploitation. However, the lack of telemetry is unsurprising—logins using cached credentials do not raise red flags, nor are they generally flagged by security endpoints as suspicious since they conform to expected business logic.What is clear is the latent risk in environments where credential hygiene is already under strain. Small businesses, which often rely on a combination of Microsoft accounts for device management and RDP for off-site access, are especially vulnerable. In hybrid work scenarios, family-shared devices, or cloud gaming setups, former users or family members may retain remote access capabilities long after their intended privileges should have expired.
Strengths of the Design: Usability, Redundancy, and Offline Access
To be fair, Microsoft’s rationale for local credential caching is not without merit. In remote or resource-constrained environments (e.g., ships, field stations, disaster zones), devices may go weeks or months without reliable connectivity to update authentication tokens or cloud policies. In such cases, denying access due to expired passwords could result in critical productivity loss, device lockout, or stalled remediation efforts.Further, this approach minimizes support overhead for organizations with off-premises or frequently disconnected endpoints. The design effectively balances seamless usability with backwards compatibility across a range of application scenarios—a priority for a platform as widely deployed as Windows.
Risks and Weaknesses: Security Blind Spots and Persistence
Yet these strengths come at a price. The inability to reliably, instantly invalidate all copies of a revoked password undermines the most basic form of credential hygiene. In security-sensitive industries (healthcare, government, finance), where a single unauthorized login can be catastrophic, the continued acceptance of legacy credentials via RDP is an unacceptable blind spot.This is particularly problematic where users are unaware of the risk. Microsoft’s documentation and account management UX do not clearly communicate the nuances of local credential cache invalidation, nor provide tools to check or forcibly clear authentication tokens after a password change. In essence, the very feature designed to prevent accidental lockouts introduces a persistent, silent vulnerability that may never be detected until it is too late.
Industry Response and Calls for Change
Security professionals continue to pressure Microsoft for a re-examination of this design decision. Some advocate for a secure “cache invalidation on password reset” toggle that lets administrators choose, per device or policy, whether or not to allow cached passwords to persist after a cloud-side credential change.Others, referencing best practices from competing platforms (e.g., modern macOS or Linux environments), point to more immediate or granular invalidation mechanisms, such as expirable authentication tokens or forced device reauthentication upon credential rotation. Such approaches reduce usability friction but tip the balance toward security—arguably the correct default in today’s threat landscape.
At present, Microsoft has not announced plans to offer such features or address these concerns directly beyond the recent documentation change. Absent a technical fix, user education will remain the weakest link; unless administrators and home users are both aware of, and actively monitor for, the persistence of cached credentials, systems will remain at risk.
Recommendations for Users and Administrators
Until further changes are implemented, both individual users and enterprise administrators should take proactive steps to mitigate exposure:- Audit RDP Usage: Review and restrict which users, groups, or accounts have RDP enabled, and disable RDP when remote access is not needed.
- Favor Local Accounts for RDP: Where possible, use local Windows user accounts for machines requiring RDP rather than personal Microsoft/Azure accounts.
- Monitor Login Activity: Employ endpoint protection platforms to help detect anomalous logins, even if they appear as legitimate, and correlate with credential change events.
- Force Device Reauthentication: After changing a Microsoft or Azure account password, sign out fully from all sessions on affected PCs, reboot, or force a system-wide credential refresh.
- Educate Users: Make users aware that simply changing a cloud password does not always instantly secure all their associated devices.
- Stay Informed: Keep up to date with Microsoft’s evolving documentation on authentication, RDP, and credential management, as future adjustments may offer new controls or mitigations.
Looking Ahead: Balancing Usability, Compatibility, and Security
The persistent use of revoked passwords for RDP access in Windows, and Microsoft’s stance that this is “by design,” highlight the sometimes difficult tradeoffs between seamless, flexible usability and strict security enforcement. As more work—and more risks—migrate to the cloud and remote-first environments, the need for transparency about these tradeoffs becomes paramount.For now, users are left with limited technical recourse and a heavy reliance on procedural and policy controls to mitigate risk. The best defense is layered: minimizing RDP exposure, favoring local credentials where possible, and continually monitoring systems for unauthorized access.
Security researchers and advocates continue to work with vendors like Microsoft to close these legacy gaps. In the meantime, all users—novice and advanced alike—should view password hygiene not as a one-time fix, but as an ongoing, multi-layered practice. Only then can the promise of both usability and security in a remote, interconnected world be reconciled.
Source: WinBuzzer Windows Remote Desktop Protocol Allows Revoked Passwords; Microsoft Calls it a Feature - WinBuzzer
