I don't think Licensed Software has anything to do with whether machines are managed or not. Unmanaging them removes them from being in any Smart Groups and policies will not run on them, but that's it as far as I know. I think Licensed Software simply looks at how many installs of a given software title it sees across the database, unmanaged or managed.

In short, I don't think you're missing anything, but I'm not sure how you would exclude those unmanaged systems from Licensed Software unless there was a way to use a Smart Group of only managed devices within the Licensed Software title, but there doesn't seem to be a way to do that. Hate to say it, but sounds like a Feature Request is in order.

Yeah, figured it might be a feature request. At least I'm not missing the obvious (again). Thanks!

@cwaldrip Did you ever create the feature request or find a way to remove the license when the device becomes un-managed?

Going through a major refresh at the moment and would like the Licensed Software to actually reflect what is in use.

Best I can figure to so what I was hoping is to have a process on machines that runs daily to check the management status of the machine. If it's no longer managed then specific apps would be deleted. Never moved forward with it though...