Vortex does NOT have to be installed on the same drive as you game. "HardToRegister" keeps repeating that "tip", which ist just confusing people.
What has to be on the same drive as your game is the mods' installation directory. But Vortex will warn you anyway, if you try to put the mod installation path on another drive.
The purpose of the "Multi-User Mode" is, that if you're enabling it, Vortex will store its own data in a directory which is accessible to all users on the system (i.e. C:\Program Data), whereas if you use the "Single-User Mode" Voretex' data will be stored in your own user profile (i.e. C:\users\<user>\AppData\Roamin). This way, each user on the system has his own, separate modding config.
If you switch the mode, Vortex doesn't see it's previous config, any longer, it looks in a different place and since there's nothing there, it starts from scratch, with no config at all.
You can actually manually copy the config data by hand if you want to move from a single user mode to the multi user mode. But (as far as I know) it doesn't do that on its own - which is good, because it could mean overwriting a config the user might want to use again later.
So this is just a case of not really understanding what an option does. Which means, it might be not be explained well enough. On the other hand, people tend NOT to read longer descriptions anyway, so there's really no winning for a software designer in such cases.