I think you should allow users to at the same time, restrict downloading AND restrict them from sharing the link externally.
As it stands, I can only protect my information from being downloaded (if I copy & paste a view link which disables downloading within the folder) but not from that link being passed around for others to access and view.
OR
I can protect against the link from being shared to other users by sharing the folder using the Dropbox email invitation feature, but this does not allow me to prevent that user from downloading that information.
Both should be an option for the user to choose from when I decide I am sharing information. The functionality is there, but for some reason not applicable to work at the same time which is strange.