Private network issue - Windows 7 machine not restricting Windows 8 on the network

Question

I have 2 machines at my home, a windows 7 home premium and a new machine with windows 8.1.  The windows 8 machine can get to anything, regardless of user account, regardless of directory, including
hidden files and folders, on my windows 7 machines without requiring any kind of authentication.  This is not the case for a 2nd windows 7 machine that I can connect to the same network - it can't see the first windows 7 machine on the network at all. 
I've validated that the advanced sharing options on my windows 7 machine are set to the following (in all the network profiles):
Network discovery is turned off
file and printer sharing is turned off
public folder sharing is turned off
media streaming is blocked
file sharing encryption is enabled for 40- and 56-bit encryption (to allow a Vista laptop to share files)
password protected sharing is turned on
I'm not using Homegroup, and have ensured that even the names of each not-used Homegroup on each machine is different, and the passwords for each homegroup is different just in case.
I can go to the File Explorer on the windows 8 machine, and in the network section, the windows 7 machine is visible (why since it is not discoverable?).  If I go to Windows Explorer on the windows 7 machine, I get an error message that network
discovery must be enabled for me to view other devices on the network....
From File Explorer on my windows 8 machine, I can select the C: drive on the windows 7 machine, and see any folder, any file without any restriction.  There is no prompt for userid / password, and the userid I'm using on the windows 8 machine
does not exist on the windows 7 machine.  I can READ anything, I can copy any file from the windows 7 machine to the windows 8 machine, but I do get an error message that I need permission from SYSTEM to save some changes directly to the windows 7 machine
(for example, renaming a file in the windows\winSxS directory.
I really want to have the windows 7 machine discoverable so I can get to the windows 8 machine too.  I would like to force userid/password authentication on each machine (both have multiple user accounts) when accessed from a network.  But
my primary problem is the lack of blocking any access from the windows 8 machine to the windows 7 machine....  Any help appreciated.

Answer 1

Hi,
"I'm not using Homegroup, and have ensured that even the names of each not-used Homegroup on each machine is different, and the passwords for each homegroup is different just in case."
I am confused about this sentence. Did you use HomeGroup on earth?
In addition, I suspect the Windows 7 and Windows 8 computer have the same local administrator user account and password. Both UNC access and Windows log on use the SLA authentication. The LSA handles user logon and authentication on the local computer,
and if the authentication package processing the logon request supports pass-through authentication, the LSA can also log users on to other computers on the network. So, using the same administrator account with same password will bypass the authentication
in UNC.
Please change the local administrator user password which you used to access the Windows 7 for Windows 8 machine for test.
Karen Hu
TechNet Community Support