Symptoms
You setup and added users in cPanel under Directory Privacy but the password set do not work.
Description
Sometimes server administrators reset owner and groups on a cPanel account but the htpasswd files get missed setting the correct group. The users .htpasswds/ folder and sub folders need to have the nobody group set.
Workaround
This command will find the users folders and set the group accordingly. In this example the cPanel username is rocks.
find /home/rocks/.htpasswds/ -type d -exec chgrp nobody '{}' \;
The passwd file should still be 644 and the cPanel users user and group like
05:36:18[cp1]# ls -al passwd
-rw-r--r-- 1 rocks rocks 94 Nov 2 2020 passwd
05:36:23[cp1]#