Permissions for all authenticated users was corrupted in a Classic mode web application sharepoint 2010

Recently I was working on a Form library which stopped inheriting permissions from the parent.

Issue:

"All authenticated users" were added to the form library, however none of the users were able to access this list.

Upon investigating further (by clicking on the user account), found out that for some reason the account was claims based, even though the web application was classic mode;

This is what was displayed:
Account: (c:0(.s|true) 
Name: All Authenticated Users

Fix:

Deleted the account and re-added