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Here is the official word from Microsoft TechNet, The C:\Users folder is shared when any sub folders from C:\Users\<username>\ is shared. The article is stale and mostly unhelpful, but worth knowing to complete the story.
Shared memory is the simplest protocol to use and has no configurable settings. Because clients using the shared memory protocol can only connect to a SQL Server instance running on the same computer, it is not useful for most database activity. Use the shared memory protocol for troubleshooting when you suspect the other protocols are configured incorrectly.