Can you please provide more details, as this report is confusing and somewhat ambiguous?
"Prompts to confirm that the user must ack the terms & services" suggests the "Force terms and rules agreement" option is applied. That only applies to logged in users, so that wouldn't come up during a password reset request.
I've just attempted to do a password reset in various ways. I get the password reset email. Clicking that, takes me to the password reset page and I do not get the prompt to accept the Ts & Cs until the password is changed and I'm logged in. I've followed the password reset confirmation link from the email while logged out and logged in and it all works as expected.