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I think you must patch your Solaris 10, then root is no longer exempted from the complexity rules.
man passwd on an old Solaris 10 says:
While a newer Solaris 10 says
This article...

Also, if root runs the passwd user command, the rules do not apply.
But they do apply if the user runs the passwd command.

Are your users local i.e. in the /etc/passwd file?
The /etc/default/passwd rules only apply to local users (who have UID!=0).