What is the effective minimum password length for User1 and Admin1?

Box 1: 9

When multiple PSOs apply to a user, the PSO with the highest precedence (lowest precedence number) applies which in this case is PSO1.

Box 2: 8

There are no PSOs applied to Admin1 so the password policy from the Default Domain GPO applies.

The Minimum password length setting in GPO1 would only apply to local user accounts on computers in OU1. It does not apply to domain user accounts.