Here is the rundown of the setup

All User Group Policy (Applied to the root of user source)
Admin Group policy (Applied to specific users)

The Admin Group Policy simply ticks the "Disable User Configuration settings" to undo anything applied by the All User Group policy.

The issue is next time a regular user logs in the All User Group Policy doesn't have any affect and gpresult says it's filter out because it's disable.

I would have expected that without the Admin group policy applied that the "Disable User Configuration settings" option should have cleared but it doesn't.