How are you applying the Policy ?
I see both are applied to "user assignments group"
do we need to apply it on different user assignments group?but this policy is working fine for most of the machines while some machines with allow usb rule are getting blocked.
I would normally create 2 new user assignment groups Allow USB and Disallow USB and create 2 new AD Groups with the same name, and make those groups part of the assignment groups respectively.
Then, add users into each AD group as required