In your example (C:\test) what happens if you just Deny User B via the Access Permissions?
Description of File Sharing and Permissions in Windows XP
HOW TO: Set, View, Change, or Remove File and Folder Permissions in Windows XP
Enabling and Disabling Simple File Sharing.
Windows XP Home Edition-based computers always have Simple File Sharing enabled. Windows XP Professional-based computers that are joined to a workgroup have the Simple File Sharing UI enabled by default. Windows XP Professional-based computers that are joined to a domain use only the classic file sharing and security interface. When you use the Simple File Sharing UI (located in the folder's properties), both share and file permissions are configured.
If you disable Simple File Sharing, you have more control over the permissions to individual users; however, you must have advanced knowledge of NTFS and share permissions to keep your folders and files secure. If you disable Simple File Sharing, the Shared Documents feature is not turned off.
To turn Simple File Sharing on or off in Windows XP Professional:
Double-click My Computer on the desktop.
On the Tools menu, click Folder Options .
Click the View tab, and then click to select the Use Simple File Sharing (Recommended) check box to enable Simple File Sharing (click to clear this check box to disable this feature).
Setting permissions. (Read the Help and Support program article, it has a lot of useful information).