Manage Users will only give access to the server, this is different than panel access.
If you Grant Privileges to a user and also check the box "ALL current and future users?" then that panel user could use Manage Users to grant there own server access. (edit to fix typo here.)
It might be more clear what the Grant Privileges option does if you click the button to "Grant Privileges to a new person" and study the next screen. (You can cancel out, you don't actually have to complete the process.)