When your users authenticate, they should be authenticating against MSAD, so yes, they would use the new password. Now, if the password has expired, I normally find that they cannot log into Moodle until it is changed on MSAD. Also, you probably want to make sure that the password is not cached in Moodle as that might confuse things (LDAP setting.)
Authentication
What happend with user password with LDAP?
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