@olsen
On a slightly related note, with OS 3.2...
- what do C:Owner and C:Group actually do?
They set up which specific user and which members of a specific group may access the files, directories, etc. on a volume you control and which is made available for use through a networked file system that enforces these access controls. One example of this kind of file system being the one implemented by the Envoy filesystem.service, which in turn draws upon the local Envoy user and group database via accounts.library.
Basically, "Owner" and "Group" work much like "Protect" does, except that they change the FileInfoBlock.fib_User and FileInfoBlock.fib_Group information of the directories, files, etc. in question.
- what do C:List LFORMAT %U and %G actually show?
They show the name of the user and group, respectively, who/which may have access rights for the respective file, directory, etc.
It's the file system's business to translate the numeric IDs stored in the FileInfoBlock.fib_User and FileInfoBlock.fib_Group into human-readable information. If this is a networked file system, such as exported by Envoy's filesystem.service, then the mapping between the numeric IDs and their associated names is again performed through accounts.library.
If the file system cannot translate the numeric IDs for user and/or group, then the "List" command will just show the numbers as a fall-back.
What user/group database is supposed to be in place here? Where is this supposed to go?
If this is Envoy's filesystem.service providing access, you would first populate its database through the "Accounts Manager" tool, then assign the access rights for the local volume which you want to export.
Integration with Roadshow usergroup.library? Old MuFS? Does Amiga need equivalent of nsswitch? 
The way this was designed, it's the network file system which needs to enforce the access rights. Because the client has to be granted permission to access the exported files, directories, etc. the file system server can effectively deny access.
So much for theory. The hashing algorithm behind the Envoy user/group database is very weak and could be cracked easily. Which is probably no surprise, given how little was known about one-way hash functions back in the day outside the circle of security experts. Deploying a Unix-like password hash function scheme based on DES in 1992 would have been a real firecracker. At about that time, there were two BSD 4.4Lite-2 source code variants, the domestic and the export version. Only the weakened export version was deemed "safe". So, no fancy password hash function for Envoy

I have no idea how effective MuFS actually was/is. The Amiga operating system is single user by default because the kind of controls a multi-user operating system provides would have been hard to implement without memory protection. Costly, too, since it would have had to be built around dedicated hardware (such as the Sun 2/3 made use of) making the entire system run more slowly (how does that fit into the feature set of a game machine?). Retrofitting security onto an operating system not designed to support it is always painful
