“Concerns Rise as Windows 11 23H2 to 25H2 Upgrade Reportedly Disrupts Internet Connectivity”

A persistent flaw in Windows 11 in-place upgrades is allegedly erasing vital 802.1X wired authentication settings, leaving corporate workstations entirely disconnected until manual actions are taken.

System administrators in Reddit’s r/sysadmin group have raised concerns as the issue initially noted during Windows 10-to-11 transitions has resurfaced in the latest annual Windows 11 version upgrades, including the 23H2-to-24H2 and 23H2-to-25H2 upgrade routes.

What’s Occurring

During a direct Windows 11 upgrade, the contents of the C:Windowsdot3svcPolicies directory, which houses 802.1X wired network (LAN) authentication profiles applied through Group Policy, are quietly erased.

The dot3svc service (Wired AutoConfig) depends on these policy files for authenticating devices against network switches that enforce IEEE 802.1X port-based access control.

Upon deletion of the folder, the upgraded device loses all wired network connectivity as soon as it boots into the new operating system version, effectively isolating it from the corporate network.

The paradoxical nature of this bug makes it especially harmful in corporate settings: without network connectivity, the device cannot receive a new Group Policy update to reinstate its 802.1X settings.

Administrators must physically connect the affected unit to a non-802.1X-enforced switch port or network segment, manually execute gpupdate /force, and then reconnect to the secure port. Only then will the wired authentication settings be rewritten to the dot3svcPolicies directory.

The issue is not new. Documented incidents on Microsoft Q&A date back to Windows 10 22H2 → Windows 11 23H2 upgrades, with numerous reports confirming 802.1X authentication failures immediately post-upgrade.

However, system administrators verify that the same data-loss issue is now recurring across annual Windows 11 version upgrades, implying that the problem has persisted through at least three significant release transitions without an official remedy from Microsoft.

In certain upgrade situations, the dilemma goes beyond dot3svc policy files; in-place upgrades have also been reported to erase the device’s computer certificate store, further exacerbating authentication failures for organizations that depend on EAP-TLS with PKI certificates.

Available Solutions

System administrators have documented various temporary solutions while waiting for an official fix:

• Backup and Restore: Copy C:Windowsdot3svcPolicies to external storage prior to upgrading and restore it immediately after the new OS starts.
• Post-upgrade gpupdate: Connect the device to a non-dot1x port and execute gpupdate /force /target:computer to enforce policy re-application.
• SetupCompleteTemplate.cmd: Integrate LAN profile restoration commands into the Windows setup completion script.
• MECM task sequence step: For managed deployments, include a post-upgrade step to reapply 802.1X settings before the device reconnects to the secured network.

Microsoft has not officially acknowledged this regression as a known issue on its Windows 11 release health dashboard, and no specific KB article or hotfix has been made available as of this writing.

Administrators managing extensive fleets should review their upgrade procedures and incorporate dot3svc policy backup measures before rolling out Windows 11 24H2 or 25H2 on a large scale.