Yes, that drove me crazy when I first encountered it after upgrading a system from FMP 5.5 to FMP 10. I've since figured out a way to work around this.
Set up an account in Manage | Security with an extremely limited privilege set. You may need to experiment to get one as limited as possible but still works and I strongly recommend that you keep a back up copy around saved before making changes to manage | security and file options just in case you accidentally lock yourself out of the file.
Once you have an account set up. Modify FileOptions to automatically open the file with this account and password. If you stopped here, the file would open without asking for a password, but you would be able to do nothing else with it. The next step is to set up a looping script with the re-Login script step. This script step can be set up to open the password dialog, but now you can specify that the account name be left blank. You use a loop so that if the user makes a mistake entering their credentials, they get an error message and then the password dialog appears for another try. (And if you want to up your security, you can count the number of tries and shut things down with some sort of notification such as an email after N number of failed tries.)
Thanks! Sorry it took me so long to reply. Honestly, the email notification got lost in my cluttered inbox and I had not re-visited this issue yet. Wow... that's a crazy way around having to do something that seems like it should be simplistic, but hey - if it works! Thanks again.