Restrict users from uploading executable files in LaunchPad

I am trying to restrict users from uploading executable files using New -> Local Document Options. I have achieved this by denying "add objects to folder" for content type "agnostic" in our QA environment but it's not working in prod for some reason. It looks like something is overriding that setting in prod.

Here is what I did in QA to block executable files

CMC --> Personal Folders--> Manage --> Top Level Security --> All Personal Folders --> Everyone (group) -->Assign Security -->Advanced-->Add/Remove Rights-->Content ->agnostic --> Checked Deny add objects to the folders that user owns and Deny add objects to the folder

Any help would be appreciated.

Thanks in advance.