This was with a fresh saucy install (Nov 23 2013). I added a new user using 
gnome-control-center without setting a password. Then the admin set the 
password for the user, removing the automatic login toggle.
Though, the user remained in the nopasswdlogin group, so it could login without 
any password. No indication of this was shown in gnome-control-center. By 
manually removing the user from that group (deluser xxx nopasswdlogin), the 
issue was resolved for that user.

So this bug report is about not removing the user from the nopasswdlogin
group.

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https://bugs.launchpad.net/bugs/906081

Title:
  Disabling 'Login without a password' does not remove user from the
  nopasswdlogin group

Status in “gnome-control-center” package in Ubuntu:
  Confirmed

Bug description:
  Fresh install of Ubuntu Oneiric.  Created a new user account using
  'adduser' on the command line, then set 'Login without a password' via
  'User Management' in gnome-control-center.  After performing some
  additional initial configuration of the box, went back to 'User
  Management', disabled 'Login without a password', and configured a
  password for the user.  On subsequent reboots, was still able to login
  without a password.  Tried enabling and disabling 'Login without a
  password' several times via 'User Management', but eventually had to
  manually remove the user from the 'nopasswdlogin' group to disable
  this feature.

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