Hi! Probably I am ignoring something blatantly obvious so apologies in advance.
I have business standard plan. I want to share the content of a new folder with somebody from an external company so I upload a file to this folder and set password require for the file as seen in the attached screenshot. I sent the invitation, it was opened following the link and this person could access the file and no password was requested AFAIK (this person already has a personal dropbox account).

Extra question: why this person appears as External Participant in the activity log and not identified with his username (since he has a dropbox account, although he is not included in my company's teams).