DragonDon
The only ibay setting that creates the situation where the ibay does not act like a web accessible share is
No access.
All other setting choices enable the ibay for web access (using a web browser), be it limited to local network only (private) or wide open to everyone on the Internet (public).
Whenever the ibay is enabled for web access, then all the folders will be visible when accessed from a Windows/samba share or similar. I am not referring to web browser access, but the likes of My Network Places in Windows Explorer.
If web access is disabled ie (No Access setting) then users will only see files in what appears to be the main ibay name, they will not see the .../files folder, it is actually hidden from view.
If web access is enabled, then those same files will now appear to be in a subfolder of the ibay called .../files
What is concerning me is that user1 can see all folders and not "only the contents of the files directory".
I suggest you change the access permission in the ibay setup to
No access
You can then access the files via Windows share/samba, but you will not be able to access the files locally (privately) or externally (publicly) via a web browser
ie on a web enabled ibay this would be at
http://yourdomain/ibaynameHope that clarifies it and makes sense to you.