On both the 8700 i am using via USB, v4.5 and an 8120, v4.3, there are two options above the Content Compresion.
I have Password, with various options and then "Lock Handheld Upon Holstering".
Which HH and which OS are you using? It may help someone else who picks up this thread.
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BES, 4.1.7, was SBE now full BES
Domino v7.0.2
Windows Server 2003, standalone
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