On Windows Phone 7.5 devices simple password cannot be used after the alphanumeric requirement is lifted
Posted by on 18 November 2011 12:13 PM

(WP 7.5)  On devices operating on Windows Phone 7.5, when the requirement for an Alphanumeric Password is disabled on the server, users must still use an alphnumeric password on the device.

However, if the Require Password is disabled on the server, synchronized to the device, and then re-enabled, users can create a simple password.  B6699

This has been observed on the LG Quantum running Windows Phone 7.5.