It sounds wrong to me, but I have not done it this way personally.
Is this pointing to the share which already existed? If there are any permission issues and the user can't connect to <share you define in the policy>\username you might come unstuck and get bumped down to a regular local profile. ANd you shoudl not use any kind of placeholder like %username% in the policy setting
Do you have folders already for these profiles, and are they named exactly the same as the username?
Alternative might be to flip this round and leave the AD properties and use this GP set to disable and applied to your new server in the other domain


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