Using this action will create a user with the password that you defined. it’s very much like the sign up action, except that the user won’t be logged in after the action. You’ll be able to refer to this user in a subsequent action of the workflow if needed.
To have such a user reset the password, you just need to send a reset password email. There isn’t really the option to have them validate their email, because if you send them a reset password email, you’ll know the email is validated…