No, it's not possible to isolate certain users in Manage Users, to be managed only by certain User Roles. Either they can Manage Users (all users) or they can not mange any.

Generally any Admin can see and edit any user in the account, but other roles typically not.

Self Service Registration
and Auto Allocation of Role (based on email domain) can generally deal with most issues.

Also consider than in most cases users self-register (varies based on account settings), and so technically the user was 'created' by themselves.

There's also user Privacy Policy to consider.

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