Asking After All These Years: Password Protected Sharing

I have been successfully networking all systems from XP to Win8 with each other and with Tiger to Mt. Lion forever. Fortunately, I have never had to do anything extraordinary because I wouldn't have known how. The strangest thing I have encountered in this regard is Windows password protected sharing. Despite all my practical experience, this "feature" almost never does completely what I expect. For the most part, I always just say "whatever," and set my Windows machines so they work as close to the way I want as is possible (for me). I know there are some good networking people on board so I finally have decided to ask if others find password protected sharing to be as strange as I do. I have read numerous explanations of password protected sharing, but I never think those doing the writing have ever tried to use password protected sharing from what they say. A couple of examples will partially illustrate what I am talking about.

All my Win machines (2 Win7's and a Win8) currently have password protected sharing enabled. Yet, they virtually never require a user name and password when sharing. The user names and passwords are different on each of the machines. Sometimes they do require user names and passwords after restarting all, for example, of the machines. My Macs currently require user names and passwords to connect with the Win machines. However, they did the same thing when password protected sharing was off on all the Wins. Go figure.

And, then there is the screen below that drives me nuts since it generally does not describe what happens as best I can tell--as indicated above. And, does it really mean that one trying to access "my" Win across my network has to have a user name and password on "my" Win to do so? Well that never is the case. Wins can always access other Wins on my network whether or not password protected sharing is enabled anywhere or nowhere and no matter whether they have user names and passwords on the other machines.