Why would privacy not be working on a ip office, 8.1. The settings are correct in the user fields. The phones are ip phones.
Essential? Preferred? Which release?
Is the other user accessing a trunk line? are trunks showing on the sets?
I bet your trying to use line appearance buttons. No?
No appearance except on the reception phone, users all dial 9 for a outside line. It is an essential release 8.1.