Yes. You don't see it often, but drives can be mounted per user session instead of at the system level.

The easiest way to see this is to use subst to map a drive and then try to navigate to that drive from a UAC-elevated command line. (You won't see the drive since it exists in a different session.)

Mapped network drives and drives shared over remote desktop are other examples of per-user mounts.

If the user is mapping a network location they have access to, obviously yes.

I'm guessing this thing is probably exposed via WebDAV.

edited a bit for clarity.