This is most likely due to their email settings in the UserCP. It's under General Settings I believe, not under the AUT settings.
Users choose in their UserCP if they wish to receive emails from users and from admins. By default, receiving emails from users isn't selected (of course, you maybe changed that option for all new users on your forum). If it is selected, then users can email other users from postbit's drop down menu. This setting maybe affects also this mod.
Check in ACP user's settings in Browsing options (on the right at the bottom) two highest options. First is to receive emails from admins, second from users.
That is definitely not the issue. The default is from all members for my forum, and that is verified as working fine.
No, this mod (AUT) uses as main setting general vB setting. If users don't want to receive emails from other users in general, AUT couldn't send them, as vB (main program, not AUT mod) blocks it.
Users to receive email needs to settings to have enabled, both general vB setting and AUT setting to receive certain emails from AUT.
OK I am testing this now. If true, I will need to modify that behavior. Hopefully I can find it in the PHP somewhere. I don't want people to email each other. What I do what is the mention mod to send the emails.
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