If it helps, I've reproduced this in a fresh Ubuntu Mate virtual
machine.

1. Install Ubuntu Mate following all the usual steps until you get to the 
account creation screen.
2. Create a user account with a password and leave "require password at login" 
checked.
3. Finish installation and reboot.
4. Go to "System" -> "Administration" -> "Users and Groups".
5. Change password from "Asked on logon" to "Not asked on logon".
6. Lock your machine.
7. Press "Switch User".
8. Observe no password is required to unlock as the current user.

For some reason, the problem doesn't happen when you set your account to
not require a password at installation. Even more oddly, the user
account still shows "Asked on logon" for the user created at
installation, even though the option to not require a password was
checked, and seems to be effective at boot. I guess they must just be
implemented in different ways.

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https://bugs.launchpad.net/bugs/1706770

Title:
  Lock screen can be bypassed when auto-login is enabled.

Status in ubuntu-mate:
  New
Status in lightdm package in Ubuntu:
  Confirmed
Status in mate-session-manager package in Ubuntu:
  Confirmed

Bug description:
  16.04 LTS
  =========

  Hi,

  My machine is set up with full-disk encryption, so it requires a
  password when I boot it up. Because of this I thought I would enable
  auto-login to avoid having to enter two passwords at boot.

  When I leave my computer for short periods of time, I lock it. I
  thought this was working fine for a long time, but I've discovered the
  lock screen is actually easily bypassable when auto-login is enabled.
  All one has to do is click "Switch User" on the lock screen, then
  press "Unlock" and the computer unlocks without prompting for a
  password.

  Perhaps this is just me being an idiot, but I thought this was secure
  until now. It seems like either unlocking should always require a
  password (otherwise what's the point of locking in the first place) or
  it should be made totally obvious that unlocking doesn't actually
  require a password (i.e. removing the password box from the lock
  screen when auto-login is enabled).

  Thanks,
  Chris

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