I'm not sure if this is a PowerShell related question, but yes the "cifs setup" command does require a password change if the /etc/passwd file does not exist. If you use the DataONTAP PowerShell toolkit, you can create this file with the "New-NaCifsPasswordFile" cmdlet without needing to change the root password. Alternatively you could create the file at the storage prompt using the wrfile command with the text from another controller.
That file is commonly used to map usernames to user IDs, but the passwords are ignored unless you have a service (e.g. cifs, ftp) configured to use passwd authentication.