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I'm either confused by your description or something is not working with the user creation part of this module. It sounds like you should be able to allow someone "without being given full "administer users" permission" the ability to create users within a specified role.
I have checked the "create users" on the module settings, but the only way I can get them to create users at all is to also give them "administer users" permission. And then they can edite/delete and create all roles.