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FollowSeparating Setting 8.2 Control over the ability of DM's editing/reporting time on behalf of team members
Setting 8.2 'People can assign themselves to work items' when set to 'Don't Allow' prevents Direct Managers from editing or reporting time on behalf of team members.
There should be a separate option that does not change the behavior of a setting 8.2 to allow Direct Managers to edit and report time on behalf of team members.
Reference: CR-610960
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