Microsoft confirmed the error and is working on a patch for Windows 11 and Windows 10 to fix the problem. In the meantime, there is a temporary fix to really erase all data on reset.
Be careful when you reset an old Windows PC and pass it on to a new user. This is because there is a chance that your data will still be visible. Those who perform a manual reset via Windows itself, Intune or another MDM tool will be inconvenienced, regardless of whether the PC uses Bitlocker encryption or not.
The flaw is in the OneDrive cloud storage service that does not delete locally synced files. Those end up in the Windows.old folder and are then visible to the new user. Files only in OneDrive’s cloud are not physically on the PC and are not affected.
The problem is in Windows 11 (21H2) and Windows 10 (versions 21H2, 21H1, 20H2). Microsoft is working on a patch but in the meantime is also offering a temporary solution: disconnect your OneDrive account before you reset or delete OneDrive. Microsoft has issued a handy guide for this.
Those who have already done a reset and would still like to delete all files can go to Storage Management in Settings. There you can free up extra space on your PC and delete the Windows.old folder. This will also solve the problem.
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