Hello,
one of my users set his password to something surrounded by curly braces, and promptly all access to his mailbox was refused. After looking through the logs I found an entry "Unknown password scheme xxxx", where "xxxx" is the user's password, but without the curly braces. I then browsed through the documentation and there was explained that it is possible to prefix the password with the password scheme in curly braces, like "{PLAIN}xxxx" where xxxx is the password itself.
Manually altering the users password in the database to "{PLAIN}xxxx" (where "xxxx" is the user's password WITH curly braces) fixed this problem for me at this time, but the time a user chooses such a strange password I would have to edit the table again. So in my opinion the {SCHEME}-prefix is not a useful thing. Why would anyone need it, anyway? Shouldn't all passwords have the same scheme which is set in the dovecot.conf file once?
If the feature is indeed used: with a database lookup it should be replaced by an optional database field or, if that's not possible, it should be possible to disable this feature from the config file.
Frank