Below is a comment explaining the changes in the Totara 2.5.7 patch "T-11746 - Changed the totara sync behaviour around user passwords" the full comment thread is on the partners forum here: https://totara.community/mod/forum/discuss.php?d=3632
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Hey Guys,
I have a patch in review for this issue now, you should hopefully see it in the next 2.5 release (4th of Feb). But I thought I should describe the new behaviour and let people have their say in advance.
So how it works with the new patch is the same if you put something in the password field. So if you put "pw112" in there it would set that as the password for the user, for both new or existing users. However if you left it blank instead of throwing a sanity error when checking the file it will now generate passwords for new users and email them on the next cron run, and leave the password as whatever it currently is for existing users.
As for Niek's original comment about only syncing new users passwords, that is now possible by just leaving all the rest blank. But there is also a new setting in the patch which is specifically "Only sync new users passwords", which should reduce the modifications that you have to make to the sync files. This defaults to off to maintain current behaviour, so you shouldn't even notice it unless this is something you want to do.
I hope that covers all the bases, let me know if I missed anything.
Cheers,
David