I confirm it also reproducible (user added to group "nopasswdlogin" and won't 
be removed.) in 17.04 current image today.
(downloaded from http://cdimage.ubuntu.com/daily-live/current/)

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https://bugs.launchpad.net/bugs/1630156

Title:
  No password needed to Log in after cancel the password and then reset
  again

Status in Light Display Manager:
  New
Status in OEM Priority Project:
  Confirmed
Status in OEM Priority Project trusty series:
  Confirmed
Status in OEM Priority Project xenial series:
  Confirmed
Status in lightdm package in Ubuntu:
  Confirmed
Status in unity-control-center package in Ubuntu:
  New

Bug description:
  Initially tested on OS: 14.04 trusty

  Also Tested with 16.04 (xenial, LTS) and 16.10 (yakkety)
  lightdm version is 1.18.2 and 1.19.5
  one test on xenial is over unity-control-center 
15.04.0+16.04.20160705-0ubuntu1.
  issue still exist

  1. Go to path "System Setting --> User Accounts--> Unlock" to unlock system 
setting.
  2. Click "Password --> Action --> Log in without password -->Change to clear 
Log in password. (as doing so, the user is added to group "nopasswdlogin")
  3. Reboot and log to desktop without password.
  4. Then do the similar action "Set a password now" as the same way to set Log 
in password. (as doing so, the user won't be removed from group "nopasswdlogin")
  5. Reboot but still no password needed at Log in interface.

  The key problem is: it won't remove user from nopasswdlogin in step 4.

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