It is a bug of CR8.
It is the CR8 patch is incorrectly reverting the password policy validation rules file back to a default state
01. login CMS by admin user.
02. Go to Content Items -> / SYSTEM / conf / sitebuilder / packages / layer7 / modules / DeveloperRegistration / xml_template.
03. Open the Property popup window of validation.xml.
04. Go to the Version tab and use the Difference button to find the latest good version.
05. revert to that version and re-publish the file
Also, the bug is scheduled to be addressed in CR 9