GPO not working Help!!!

I have a lab that consists of a 2012 R2 domain controller and one Windows 7 workstation.
Through the group policy editor on the domain controller I have edited the password policies.
Computer Configuration | Policies | Windows Settings | Security Settings | Account Policies | Password Policy
Enforce password history                                                      
Not Defined
Maximum password age                                                        
Not Defined
Minimum password age                                                         
Not Defined
Minimum password length                                                     
0 Characters
Password must meet complexity requirements                     Disabled
Store passwords using reversible encryption                         Not Defined
I have link enabled and enforced the default domain policy because I don't want it changed.
In the group policy management editor under security filtering the GPO is set for the following group:
"Authenticated Users"
I have also tried Turn off Local Group Policy objects processing
I ran gpupdate /force on both the domain controller and the workstation and I cannot change the password to a three digit password no matter what I do. I get this message:
Unable to update the password. The value provided for the new password does not meet the length, complexity, or history requirements of the domain.
gpresult shows this:
OS Configuration:            Primary Domain Controller
OS Version:                  6.3.9600
Site Name:                   Default-First-Site-Name
Roaming Profile:             N/A
Local Profile:               C:\Users\Administrator
Connected over a slow link?: No
COMPUTER SETTINGS
    CN=LAB_A,OU=Domain Controllers,DC=LAB,DC=local
    Last time Group Policy was applied: 10/5/2014 at 6:36:37 AM
    Group Policy was applied from:      Lab_A.LAB.local
    Group Policy slow link threshold:   500 kbps
    Domain Name:                        LAB
    Domain Type:                        Windows 2008 or later
    Applied Group Policy Objects
        Default Domain Policy
        Default Domain Controllers Policy
    The following GPOs were not applied because they were filtered out
        Local Group Policy
            Filtering:  Not Applied (Empty)
Does anyone have any ideas on what I am doing wrong? I don't want to use gpedit.msc on the workstation. I should be able to edit the default domain policy and have it apply to all systems on the domain right?
Thanks

Hi,
Just a confirmation. Please edit the Default Domain Controllers Policy as your above description.
Minimum password length: 0 Characters
Password must meet complexity requirements: Disabled
Then continue to edit the Default Domain Policy. Please also edit the same Password Policy settings as above.
When all complete, please run gpupdate /force command and then check if be able to change password as you expect.
In addition, please refer to DonPick’s suggestion in following thread.
Unable
to update the password. The value provided for the new password does not meet the length, complexity, or history requirements of the domain
If any update, please feel free to let us know.
Hope this helps.
Best regards,
Justin Gu

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