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Once the plugin is enabled, users' password would be stored using a new encryption method. Disabling the plugin would cause all the users not to be able to login anymore as the default encryption method is effectively changed.

Security Enhanced Directory Manager uses the SHA 256 encryption to store the password.

For example, the old standard encrypted hash for "User@123" is "448ddd517d3abb70045aea6929f02367" using MD5.
When you change the Joget directory manager to use SEDM, the new password becomes something like "@@@@whateverhashencryption@@@@". 

If you then later remove/disable the SEDM plugin, the password is unchanged at SHA 256 encryption. Because the SEDM is not in play anymore, Joget is unable to authenticate the username because it is expecting the password to be the old MD5 encryption.

Do note that passwords once changed to the new SHA 256 Encryption cannot be changed back to MD5.

If you decide you don't want to use SEDM and then delete the plugin setting, you will need to use your database backups to restore the table "dir_user" to revert back to the original passwords (using MD5 and before SEDM was implemented).

You can also run the following query to update the "dir_user" table back to the old password - An example of the SQL query is as follows:

UPDATE dir_user SET password = '5f4dcc3b5aa765d61d8327deb882cf99' WHERE id = 'username'

The "5f4dcc3b5aa765d61d8327deb882cf99" value is the word "password" using the old encryption.