Question : Microsoft document explaining why a user can unlock their machine even after their AD account is locked out?

We have started to see a trend with users, They lock their AD account out with 3 bad passwords but on the 4th or next couple tries they are able to unlock their PC's with the correct password but leaving their AD account locked out. They are unable to do anything on the network because they are still locked out.

Is this documented any where that I can show to the powers that be here?

Answer : Microsoft document explaining why a user can unlock their machine even after their AD account is locked out?

On which?  The non application of the GPO when the DC is disconnected from the network?

On point for your issue:
http://serverfault.com/questions/48144/lock-workstation-glitch-ad-windows-xp