So far, I'm unable to reproduce. However, some more insight may be gained from changing the emsrv logging level to -s0 to log all operations.
For example, on my machine with passwd.dat enabled, I get the following emsrv.log messages upon opening a client image:
15:20:21 on 06/29/11 INFO operationOpen PARAMETERS pathname=[C:\Program Files (x86)\Instantiations\VA Smalltalk\8.0\manager\mgr80.dat] mode=[66] TID[3504]
15:20:21 on 06/29/11 INFO operationRead PARAMETERS offset=[0] length=[256] TID[3504], repository C:\Program Files (x86)\Instantiations\VA Smalltalk\8.0\manager\mgr80.dat
15:20:26 on 06/29/11 INFO operationVerifyUser PARAMETERS username=[sberman] password=[******]
15:20:26 on 06/29/11 INFO operationGetCWD MESSAGE TID[3504]