We had a couple thousand users in our test AD that had the Password Not Required flag set without a password. This was causing an error when Microsoft Identity Management tried to set the password for these user objects. We used the following script to remove the flag and set a password.

$Users = Get-ADUser -searchscope subtree -ldapfilter "(&(objectCategory=User)(userAccountControl:1.2.840.113556.1.4.803:=32))"
$newPassword = (Read-Host -Prompt "Provide New Password" -AsSecureString)

foreach ($user in $Users)
Set-ADAccountPassword -Identity $User.samaccountname -NewPassword $newPassword -Reset
Set-ADAccountControl $User.samaccountname -PasswordNotRequired $false