I created a user group with access to the users component. In Global Config, all access options are marked to "Allow":
However, in admin, this menu item does not show up:
Other components are working OK, so is there anything special to do with this component?
I can not reproduce this on a Joomla! 3.7.2.
The steps below are what I did. Can you follow them and report back if this works for you?
Created the Custom User-group, it is a child of the Public - I called it "users-managers".
Gave full Permissions = set everything to Allowed for the new user-group, through the Options of the users component.
Gave Special Viewing Access Levels for the new group.
Gave only Administrator Login permissions from the Global Configuration for the new Group.
Create a new user and assign him to the new group (only to that group) - use another browser to login and test. This user should only see the following menu items on the admin menu:
System(->Control Panel only) | Users (and all children items) | Help (if it's enabled)
If the above won't produce the expected result - then see if there is any 3rd party ACL extension installed and also if there is any custom admin menu.