I have run your test (as best I can) and it does work that way.
However, that is not how we create new users. We have (unsurprisingly as we are using Groupwise) Netware servers and users connect via a Netware Login.
If I login as a Netware user that is not already a Windows user on the box then, once Windows has settled down, I start Groupwise and Formativ is not present
The Netware tool we are using to create users is called Dynamic Local User Policy
After successful Netware login this creates a Windows user account with Administrator rights using the Netware credentials
Our servers are Novell Netware 6.0 or 6.5 (we have 3 and a user can connect to any of them, they don’#t get to choose)