PolicyPak Cloud or your MDM service is delivering PolicyPak File Associations Manager settings correctly.
But Windows cannot process them unless the machine is domain joined. This is a self imposed implementation restriction for how Windows 10’s File Associations works and not a defect in PolicyPak File Associations Manager.
Therefore, you will see PolicyPak File Associations Manager licensed for PolicyPak Cloud and PolicyPak with MDM, but the settings only work when the machine is domain joined.
For a video explaining more about PolicyPak Cloud and how to use it with domain joined machines (in general), please se this video: https://kb.policypak.com/kb/article/494-policypak-cloud-and-policypak-onpremise-together-using-ppcloud-licenses