User name directory (disable global virtual directories) : This option specifies that you want to isolate FTP user sessions to the physical or virtual directory with the same name of the FTP user account. The user sees only their FTP root location and is, therefore, restricted from navigating higher up the physical or virtual directory tree
To create home directories for each user, you first need to create a physical directory under your FTP server's root folder that is named after your domain or named LocalUser for local user accounts. Next, you need to create a physical directory for each user account that will access your FTP site. The following table lists the home directory syntax for the authentication providers that ship with the FTP service.
User Account Types
Physical Home Directory Syntax
Local Windows user accounts (requires basic authentication)
Windows domain accounts (requires basic authentication)
IIS Manager or ASP.NET custom authentication user accounts
We started seeing issues where user isolation was not working and failing with “access denied” error. We checked and found NTFS and FTP default permissions to be ok and good.
We collected procmon and found that there was No access denied errors but failing with "PATH NOT FOUND"