Example case, I added the user "Bigger" and it let me save. However, https://en.wikipedia.org/wiki/User:Bigger is not registered.
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I think it's checking CentralAuth, and here there is a global account: https://en.wikipedia.org/wiki/Special:CentralAuth/Bigger. Not sure if that's the case for other usernames you tried.
Do we want to check against whatever wikis are configured on the event? Or maybe it's possible someone created an account somewhere else but hadn't browsed to the configured wiki yet, say if this was for a future event.
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Oh! That "User:Bigger is not registered" message is confusing. It should check against CentralAuth there. But I think what we're doing is fine. Closing this ticket as invalid. Thanks for checking.