- When should we "Allow members to share the site and individual files and folders" & "Allow members to invite others to the site members group" ?
Allow members to share the site and individual files and folders -– this will allow users to share individual files with people outside of the security groups/site. So essentially, any user who has access to the site will be able to click on Share document and share file with someone outside of the department.
Allow members to invite others to the site members group, [Name of Members Group] -- this setting must be enabled to let members share the site. If this box is checked – this will allow any user in Site Members group to share whole site with other users who are not originally part of the site. Moreover, these invited users will be added to the Members Group automatically even if you, SharePoint Admin/Site Owner did not add them there in the first place.
- After couple of months the files permissions will became almost impossible to maintain.
There are options to manage Unique permissions built-in to SharePoint.
From here you can see the unique permission on that library. If you click on Folder 1 it will take you that folder details. If you click on "manage permissions" it will take you the permissions page for that folder so you can change the permissions.
- Should we always disable this option and instead create multiple libraries and group the files based on the permissions we need to apply ?
I think this depends on each individual scenario. If you don't like the members to share the access to the site with others, you can keep the options unchecked.