Password configuration

I’m having some difficulty with password configuration to limit access to the control panel with Mairlist 8.0.7 Build 6037.

I have this:

Since “Also accept database user accounts” is a tickbox option I was assuming this might work without a database connection and users/groups/roles.

I get no user/password prompt at all unless I set the level to Noone(disabled) - I then get this if I access from running Mairlist:

And this old prompt if I access the control panel directly:

I tried adding a database an a user with the administrator role but it has made no difference to the behaviour at all.

Am I misunderstanding how this works? We’re coming from Mairlist 5.3 (with no database) which had a single control panel access password.