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Why did a group policy run on a group for which it was denied?

I created a group policy that will in effect block Internet access by setting erroneous proxy server settings. I set up an "Internet Users" group and denied the Apply Group Policy right for this group. However, the policy ran once for everyone, including the users in the "Internet Users" group.
I've not seen that one personally, but you may want to try and force a security policy refresh:

 secedit /refreshpolicy machine_policy /enforce


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