The mailconf module does not handle this file, but if it exists, it generates a sendmail.cf using it.
For each group, you can set/unset a check-box to enable account creation. The check-box has precedence over the privilege.
The module was doing some sanity check and had a flaw. For example, it was checking if you were simply attempting to redirect the user emails to ... the user, which was pointless. Pointless unless you redirect it somewhere else. It is valid to redirect email for user Joe another place (email@example.com) and still deliver it in the local mailbox. This is done by entering "joe firstname.lastname@example.org)
In some case, the module was confused and was rejecting your entry claiming that you were simply redirecting email to itself.
When creating a new account with a vacation text, the file was created with the wrong name.
There were also some spelling errors.