If a database user already exists, e.g. because this user was created to be used with another LedgerSMB company, it can’t be created a second time. In order to be able to use that user with the current company, it needs to be “imported” instead.
The difference between creating a new user and importing one is that the “Import” radio button should be set to “Yes” and that you should not fill out a password. If you do, the password of that user will be overwritten for all companies.
All other fields are still applicable: the data entered for other companies isn’t copied to the current company.