MBAM will not auto encrypt the system partition

First after reimaging, I need to use tpm.msc to prepare the TPM, as the TPM is running in reduced functionality. The computer reboots and clears the TPM. After the reboot, the logs no longer show any new errors.
However if the option “Configure the number of noncompliance grace period days for operating system drives” is set to zero; nothing ever happens. There are no errors in the logs.
If “Configure the number of noncompliance grace period days for operating system drives” is unconfigured. The user is prompted to encrypt, if the user choses to encrypt everything works correctly.
We are using HP Probook 6545b notebooks
Below you see the MBAM policy.
I must have missed something in the BIOS or the policy, but what?

I have checked the MBAM node in Event Viewer, policies are applying successfully. We are not using a PIN. I am beginning to believe this is a hardware limitation. As on a newer notebook I only needed to use TPM.msc to manually, prepare the TPM and after
reboot automatic encryption began. I need to solve the issue with manually needing to prepare the TPM.

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