I am hoping somebody may have some insight, or at least can confirm my findings, as to a problem with the 'Send Reset Link' when using the 'Use Email Address as Username' option.  Overall, everything works fine until 'Use Email Address as Username' is checked at which time the 'Send Reset Link' function stops sending reset emails and logs an email failure in the event log.  Resetting the 'Use Email Address as Username' as unchecked will allow the email function to start working again.  I have tested this on two separate systems (2008R2-IIS-7.5, and Windows 7 Workstation) with the same results.

I am able to reproduce the problem when setting up a new instance of 7.4.2 (though the problem exists in prior versions).  All defaults are left alone unless specifically mentioned.  Administration and testing were done using 2 separate browsers (Chrome and IE).  Steps 1 to 9 detail the setup and testing to make sure things are working.  Steps 10 to 15 detail enabling of the'Use Email Address as Username' and failure in the testing.  Steps 16 & 17 confirmed it works again once 'Use Email Address as Username' is disabled.

1. Host password created and confirmed.
2. Set valid host email.
3. Database setup.
4. Setup and test SMTP.
5. Using a 2nd browser, confirmed Send Reset Link is working for the host account.
6. Using a 2nd browser, registered a new user and received both the host’s new user notification and the user’s account pending approval email.
7. Using a 2nd browser, Send Reset Link resulted with a reminder email that the account is still pending approval.
8. Approved user and received the approval email.
9. Using a 2nd browser, Send Reset Link resulted with the reminder email being sent.
10. Checked 'Use Email Address as Username’
11. Using a 2nd browser, tried Send Reset Link with both the user name and email address but no email was sent.
12. Using a 2nd browser, registered a new user (user2) and received both the host’s new user notification and the user’s account pending approval email.
13. Using a 2nd browser, Send Reset Link for user2 with the email address but no email was sent.  Event log shows “Password Sent Failure - Cause: If the details entered were correct, you should receive a new email shortly with a link to reset your password.”
14. Approved user2 and received the approval email.
15. Using a 2nd browser, Send Reset Link for user2 with the email address but no email was sent.
16. Unchecked 'Use Email Address as Username’
17. Using a 2nd browser, Send Reset Link for user2 using the email address works.

Expected result: ‘Send Reset Link’ should send email with link when 'Use Email Address as Username’ is checked or unchecked.

Actual result: ‘Send Reset Link’ only sends email link when 'Use Email Address as Username’ is unchecked.