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When an administrator is performing a password change for a user, they do not use the onAfterRoute functionality (there is an early check and return if an administrator) however they do make use of the onUserAfterSave routine. The check for a password being previously used is therefore in force and the administrator will be presented with a message stating that the account user already has the password in their 'history' if the specified password has been previously used. This is not an error but expected functionality.
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If an administrator changes a password for a user, then the user will be prompted to change their password on their next connection.