The Favorites menu in Internet Explorer shows the user's favorites. And stuff in the
%ALLUSERSPROFILE% is visible to all users. Therefore, Internet shortcuts placed into the
%ALLUSERSPROFILE%\Favorites directory should show up on the Favorites menu of all users, right? So why doesn't it work?
Because features don't exist by default.
It's true that there are a few highly-visible cases where the items shown to the user are a combination of files from the
%USERPROFILE% and the
%ALLUSERSPROFILE%, the most commonly encountered ones being the desktop and the Start menu. But that doesn't happy as a result of magic. Somebody had to sit down and hook them up.
Even the highly visible cases show that the behavior is implemented on a case-by-case basis. For example, the Music folder does not show the items in the all-users version of the Music directory; there is just a shortcut that takes you there. Similarly, items in the all-users Documents folder do not show up in every user's Documents folder; instead there is a separate Shared Documents folder.
Each of those cases had to be hooked up separately, and most of them are not hooked up at all.
Now, the common Favorites folder may be a tempting target, seeing as the shell team even defined a
CSIDL value for it, but it's just another example of something that never got hooked up but whose vestiges didn't get completely cleaned up either.