Sorry for the delay in responding, but I wanted to talk to the rest of the moderating team first to ensure that I had my facts straight.
You can take this as official MR policy when I say that we have never permitted people to upload copyrighted material for diagnostic purposes, whether password-protected or otherwise. DiapDealer, who is a long-time moderator of the Sigil forum, tells me that in that forum they always make it absolutely clear to people who may be experiencing problems with books that they must not upload any copyrighted files (unless, of course, it's the author who is uploading it). Your statement that:
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moderators accompany their warnings about not uploading copyrighted books, with instructions to password-protect the book before uploading, in order to comply with the Forum guidelines.
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is simply untrue.
To reiterate, we never have, do not, and never will allow copyrighted books to be uploaded to MR without the copyright holder's permission, and the presence or absence of a password on the upload does not alter that policy. This is the policy of the moderating team, not the opinion of me or any other individual moderator.
Uploading a short sample of material is of course, "fair use", and is permissible.
I hope this clarifies the matter to everyone's satisfaction.