The issue is not a lightdm one if the user is still is the nopasswdlogin
group, can't reproduce it on a xenial installation though. When you set
the new password the change stick to the UI, it reflects after
validating that a password has been set? Doing those steps on a test
install the user is removed from the group when the new password is
set...

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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

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