This is a common error message when you try to reset a password from Azure management port or Self service portal. The error message is very clear here – “The Password you’ve selected does not meet your local Active Directory password policy”. So you have to start with your Active Directory password password policy.
You also see a detailed information in Event log of your directory synchronization server.
I have seen many issues related to Minimum Password Age value. By default, it is 1 day. If you are trying to change the password again on the same day , you may need to change value to 0. Anyway, the error message from Azure is directly related to the configuration you have in your AD password policy as shown below:
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