@Anna Melnyk, I know I tried opening it before! 🙂 Okay, you're right though... I just opened it and it works.

@Darcy Branchini, have you tried to open User permissions accordion? After accordion is expanded the button "Add permission" will show if user has permissions:
1) "Users: Can assign and unassign permissions to users"
2) Users: Can edit user profile

@Anna Melnyk, I just tried it again, and it's not working for me on snapshot. Here are the screenshots:

Logged in as diku_admin, added the two permissions to user Ceasar's permissions:

Open

Logged in as Ceasar, went to a user, cannot see edit options for user permissions:

Open

@Darcy Branchini I already test it with graham user on snapshot with 2 permissions only, it works.

Open

I was demo this:

Simple repro steps:
Give a user the following permissions only:
1) "Users: Can assign and unassign permissions to users"
2) Users: Can edit user profile
Log in as user to verify that it is possible to assign and unassign permissions to a user
Expected: Should be able to assign and unassign permissions to a user with these permissions

Actual: Can't assign/unassign permissions unless I also have "Settings (Users): Can create, edit and remove permission sets". "Settings (Users): Can create, edit and remove permission sets" should provide access to the Settings > Users > Permission sets feature only.

@Anna Melnyk, what instance did you demo this from today? I just tried to verify it and it didn't work for the user I setup with just these two permissions.