I did set the group policy and did an gpupdate /force to make sure it got applied for like 40 min ago or something. While i did setup this, the explorer window did show up twice without me running update. So far it seems this setting is our current workaround.
So, the GPO Computer Configuration\Policies\Administrative Templates\System\Group Policy\Turn off background refresh of Group Policy has been set to disabled.
I have not tried the registry key approach yet.
Location: HKLM\SOFTWARE\Microsoft\Windows\CurrentVersion\Policies\System
Key: DisableBkGndGroupPolicy
Setting: DWORD set to 1
Thanks JAMES OFARRELL