The TPM is ready for use, with reduced functionality

If after a successful deployment of Windows 10 and you notice that the Trusted Platform Module (TPM) is in reduced functionality mode, then this post is intended to help you. In this post, we will identify some potential known causes for this behavior and then provide the workaround for this issue as well as the measure you can take to prevent the issue from occurring during the deployment of Windows 10.

You might encounter this issue based on the following scenario.

You use Microsoft Deployment Toolkit (This can be any version of MDT that supports Windows 10) to deploy Windows 10 by using the “Enable BitLocker (offline)” step (ZTIBDE.wsf script) to pre-provision BitLocker during Windows PE in the “Preinstall” group and the deployment is successful.

However, in this scenario, you notice that the Trusted Platform Module (TPM) is in reduced functionality mode. In this situation, the TPM Management console (TPM.msc) reports the following issue:

The TPM is ready for use, with reduced functionality. Information Flags: 0x900
The TPM owner authorization is not properly stored in the registry.
Windows’s registry information about the TPM’s Storage Root Key does not match the TPM Storage Root Key or is missing.

The TPM is ready for use, with reduced functionality

If you’re faced with the TPM reduced functionality issue, you can work around this issue for new deployments until a new version of MDT is available – add the command below to the ZTIBDE.wsf script at the start of the “Function Main” section:

reg add hklm\system\currentcontrolset\services\tpm\wmi -v UseNullDerivedOwnerAuth -t REG_DWORD -d 0x01 -f

It is worth noting that devices in which the TPM is already in reduced functionality mode, the TPM must be cleared before you can mitigate this issue.

To prevent this issue from occurring, you’ll need to not pre-provision BitLocker, instead wait to enable the full system. Be aware that the deployment will take longer to complete by using this method.

According to Microsoft, the TPM reduced functionality issue occurs because the TpmValidate function in the ZTIBDE.wsf script takes ownership of the TPM from Windows PE unnecessarily. Windows should be able to correctly take ownership of the TPM before Out-of-Box Experience (OOBE) to provision it by using the correct parameters. 

When this change in ownership of the TPM from Windows PE occurs, the TPM is given parameters that Windows does not understand. Therefore, the key hierarchies in the TPM are disabled and made permanently unavailable to Windows.