Mixed Authentication support was added in 2019 and not available in 2017.
I would convert the vault to use PDM login type to detach the AD authentication, but it'll be nice that the login names match the AD. Once you get up to 2019 OR an environment that allows you the permissions you need, you can convert it back to Windows Login type. Convert to Windows login is a bit more work but not so much that it's a prohibitive process. Instructions to do so are covered in the solution S-043890 in the SOLIDWORKS Knowledge base. I imagine the process is very similar to convert to Mixed Authentication in 2019 and beyond.
Another option could be to create a local user account on one of the servers or a computer that is always on that the servers can access. Then in SWPDM add that user to the vault using ComputerName\UserName. You might need to use the fully qualified computer name to get it to find it like: ComputerName.DomainName.com.
Doing it this way SWPDM still sees the user as an Active Directory user even though it is not actually part of active directory. Then you can manage the password directly in the user settings of the system it comes from. Of course you would need administrative permissions on the computer you are creating the user on.