There are two potential issue:

1. Useradd opens /etc/login.defs.d/ but ignores test.conf despite correct permissions and content.
2. The incorrect /login.defs.d path in strace suggests a potential bug in libeconf or shadow-utils.

shadow-utils-4.15.0-6.el10.x86_64
libeconf-0.6.2-4.el10.x86_64

Is shadow-utils is linked with libeconf:

[root@clientrhel10 ~]# ldd /usr/sbin/useradd | grep libeconf
libeconf.so.0 => /lib64/libeconf.so.0 (0x00007f75d9901000)
[root@clientrhel10 ~]#

Steps to Reproduce with exped behaviour:

1. Ensure no existing users interfere: for user in $(getent passwd | awk -F: '$3 >= 1000 && $3 < 6000 {print $1}

   '); do userdel -r $user; done

1. Create snippet
   mkdir -p /etc/login.defs.d
   echo 'UID_MIN 5000' > /etc/login.defs.d/test.conf
   chmod 644 /etc/login.defs.d/test.conf
   cat /etc/login.defs.d/test.conf # Should output: UID_MIN 5000
   ls l /etc/login.defs.d/test.conf # Should show: -rw-rr-

1. Run useradd and check UID
   useradd testuser_manual
   id u testuser_manual # Expected: >= 5000 (But getting 1000) <--- This is the issue
   userdel -r testuser_manual

Logs:
Attached : strace -o /tmp/trace.log useradd testuser_snippet