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This policy controls only the first run import behavior after installation. It enables more seamless transition to Google Chrome in environments where a different browser was extensively used prior to installing the browser. This policy does not affect password manager capabilities for Google accounts.
Setting the policy to Enabled imports saved passwords from the previous default browser on first run and manual importing from the settings page is also possible.
Setting the policy to Disabled means no saved passwords are imported on first run and manual importing from the Settings page is blocked.
Leaving the policy unset means no saved passwords are imported on first run but the user can choose to do that from the settings page.