I did search the forums for "sftp chroot" and didn't find anything helpful. The link you provided wasn't very clear either.
And finally, "atm this is unsupported by SME" requires some interpretation as well. What is "atm"? And also ... "unsupported"?
It seems a little strange that when you use FTP, everything works as advertised in the contribs. But if you use SFTP, suddenly you have access to the whole drive from the root on down. Why is it with the additional security of SFTP, suddenly the whole point of the remote access controls becomes entirely defeated? It looks like something is broken, not "unsupported".
Does anyone have any clues about my client problem?