Request:

We want a feature in Jira Data Center to restrict user searchability within Projects, so a Jira Admin (or a Project Admin) can configure whether users that are added to Project A should be able to see users in Project B or not. This setting would affect the list of shown users in Mentions, User Picker.

Possible solution

There should be some sort of permission restriction that let's us restrict users ability to view users based on the project they are part of.

Currently, there is no way to do this. From Jira 9.11 and onwards we no longer check the Browse users permission for User mentions (@user) as well as Assignee and Reporter pickers. Instead, we validate the following permissions of a user that's interacting with the pickers or wants to mention someone:

• Assignee: a user needs to have the Assign issue permission to interact with the picker and change the assignee. This picker will now show all users that have the Assignable user permission in the project.
• Reporter: a user needs to have the Modify reporter and Browse projects permissions to interact with the picker and change the reporter. The picker will show users with Browse projects permission in the project.
• User mentions: a user needs to have the Browse projects permissions to mention other users on issues. The picker will show users with Browse projects permission in the project.

Based on these permissions, we define whom the user will see in these pickers and mentions. So, even if we remove the browse user permission, we might still see the users there. 

ref. https://confluence.atlassian.com/jiracore/preparing-for-jira-9-11-1267663914.html#PreparingforJira9.11-ProjectpermissionsgetextendedconfigurationBluedatacenter

The feature request should take the above information into account.