First off, THANK YOU for the location of that Event Log for LAPS, I was digging through the wrong section of Event Logs under "Microsoft".

I see this error logged throughout the day each time I tested:

"The current policy is configured to backup the password to Active Directory, but the machine is only joined to Azure Active Directory. Please configure the policy to backup the password to Azure Active Directory. No action will be taken until this is corrected."

So it looks like, despite reviewing the setting repeatedly, I was selecting Active Directory instead of Azure Active Directory. PEBCAK moment for me.

I have the policy resyncing now, will let you know if that was indeed the issue!