According to the source code, it seems you're right. But according to the
OpenLDAP 2.4 admin guide
(
http://www.openldap.org/doc/admin24/overlays.html#Password%20Policy%20Configuration
),
it should be wrong, or at least, it doesn't look consistent to me since it
mentions the following (when
pwdMustChange is set to FALSE):

The password does not need to be changed at the first bind or when the
administrator has reset the password (pwdMustChange: FALSE)

So, from what I understand, if pwdMustChange is set to TRUE, the password
needs to be changed at the first bind, or when the
administrator has reset it.

Also, the slapo-ppolicy man pages tends to mean the same thing:

*pwdMustChange*

       This attribute specifies whether users must change their passwords when
       they first bind to the directory after a password is set  or  reset  by
       the  administrator,  or  not.   If *pwdMustChange* has a value of "TRUE",
       users must change their passwords when they first bind to the directory
       after  a  password  is  set  or  reset  by  the administrator.

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