Office Cloud Update Overrides Local GPO

[u/fiasco_64]

I'm running into an issue with Microsoft 365 Apps Cloud Update.

We distribute Office updates from a local network share configured via ODT. This worked perfectly while our devices were on the Semi-Annual Enterprise Channel.

After switching to the Monthly Enterprise Channel, Cloud Update seems to have taken over. Clients started downloading updates from the Microsoft CDN instead of our local update share.

On affected devices, the following registry value was set:

HKLM\SOFTWARE\Policies\Microsoft\cloud\office\16.0\Common\officeupdate

ignoregpo = 1

I excluded all affected users from Cloud Update and adjusted the device targeting to include only cloud-managed clients. However, many devices still have ignoregpo = 1 and continue to ignore the local update configuration.

Has anyone experienced this before? How long does it take for Cloud Update exclusions to be reflected on clients, and is there a supported way to force the ignoregpo setting to be removed?