I am not sure whether this is EP related but until now I havent managed to create a user from BE that was able to log into the BE as manager or admin.
In options I have: account activation through user, send password and login by mail.
ALSO
When login by mail is enabled the password reset will ask for the username. However the user doesnt know his username because it it generated automatically. The work flow should be different. The mail if registered should receive a mail with a link to be pressed. after that the user should be able to change password. As far as I know that is the commonly used method.