Removing password protection is as simple as adding it. You do not need to remove user authorization for the directory, as all the users will be automatically deleted when you remove the password protection.
To remove password protection from a directory:
Click on the Password Protect Directories link in the Domain Menu area.
Navigate to the protected directory. Select a folder by clicking on the folder name link. Open a folder by clicking on the folder icon.
Untick the tick box in the Allow access to authorized users area.
Click on the Submit button. Click on the Password protect directories link to return to the Password Protect Directories window to confirm that it has been removed.