Hi Michael,
Ideally password policies are application to dialog users only unless exceptions are specified against the SAP profile.
Refer to SAP help for detailed information on the password policy parameters and exception details(if any).
https://help.sap.com/saphelp_nw04/helpdata/en/22/41c43ac23cef2fe10000000a114084/content.htm
Hope this helps.
Regards,
Deepak Kori