Setacl Doesn't Run When Converting to NTFS After Setup

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If you choose to format the system partition with the Windows NT file system (NTFS) during Setup, the following Registry entries are added under HKEY_LOCAL_MACHINE\CurrentControlSet\Control\Session Manager\BootExecute:

The second to last time Windows NT boots, AUTOCONV.EXE runs to converts the partition to NTFS, and SETACL.EXE runs to set default permissions on the partition. SETACL.EXE gets permission settings from the WINPERMS.TXT file. Setup places WINPERMS.TXT in the %SYSTEMROOT%\SYSTEM32 directory.

On the other hand, if you chose to convert to your partition to NTFS after you have installed Windows NT, the Autoconv registry entry is added, but the setacl command is not. Therefore, permissions taken from parameters contained in WINPERMS.TXT are not set on the NTFS partition. Thus, everyone has full control of the files on the partition.