It seems like "Test Permissions of User" does not make you to use the user permission when using prefixes.
For example, if you make a prefix that is Admin-only, you will still see that prefix when testing permissions of an user that has the mere "Registered" group membership.
I believe this is incorrect and is indeed a bug in the software.
This doesn't sound right to me at all, the Prefix then is inheriting permission from 1st usergroup if I'm reading this correctly. IE: Mods, Admins and Members are all in the "registered" primary user-group first, then in others 2nd like Mod and Admin. Hence why Prefixes are not working as they really should based on permission tick boxes checked.
Not sure if I am reading this thread right, if I am this is wrong. There's no point having permissions on Prefixes then, because they have no real effect in doing anything.
Prefixes have permissions as long as your in a group. I can't set a prefix in the open bug reports because I'm not in one of the groups that have it permitted. The tester as described above is to test how your node permissions are set up and such.