Thanks so much for helping out!!
2. What is wrong when it doesn't add the hashed password with encryption method?
Have you set `password_algorithm_prefix` in your config?
Yes, I have and everything actually works in terms of Password Plugin opening the passed/userdb file, copies the user row, but between the colons where "{CRAM-MD5}PASSWDHASH" should be there is nothing.
That leads me to believe that doveadm pw command does not work. So that leads me to think of the given path to doveadm. In the config file it is defined as:
// Path for dovecotpw/doveadm-pw (if not in the $PATH).
// Used for password_algorithm = 'dovecot'.
$config['password_dovecotpw'] = '/usr/local/sbin/doveadm pw'; // for dovecot-2.x
//$config['password_dovecotpw'] = '/usr/local/sbin/dovecotpw'; // for dovecot-1.x
But in /usr/local/sbin there is no doveadm. When I use doveadm to hash passwords manually I can do it from anywhere in the command line.
So the new question would be:
What should I configure the path line to?