What is this option used for?

Post JIRA version 5.0.3 we have the option for migrating users from 1 User Directory to another User Directory. The option is currently only available for :

1. Migrating whole directories:
1.1 Internal to Internal with Delegated Auth
1.2 Internal with Delegated Auth to Internal

Please refer to  JRA-24213 - Getting issue details... STATUS  for more details.

However, if you would like to achieve one of these : 

2. Migrating users from one directory to another:
2.1 Individually
2.2 All users in a directory

then please be aware that this option is not available at the moment. Please refer to  JRA-27868 - Getting issue details... STATUS  for more details.

When to use this?

When you want to migrate all of your users from Internal directory to Internal with Delegated Auth or viceversa.

Why don't I see this option?

If you have not added a Delegated Authentication directory under "Administration">>"User Directories" then you would not see this option on the screen.