Going to need a bit more information. The .ini file can certainly limit who can do what where, but you still need access rights in the VFS itself. I.e. you'll need 0777 directory mode or rwx for the directory you want to upload to/makedir under for non-owner/non-group users of the parent.
As of v7 the permission denied message should indicate which setting caused the denial. Check the error message and compare the text in the ()'s to what the Changelog says...
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