If you want to manage privacy for 1 file but 2 different user, it will be better to link the file pivacy to a things and set, for example, a user field (list) that will contain both user and use this field to allow access to the file. The privacy will be attached to this item instead of a file. But your case is user A doesn’t really exist, so not sure what is the issue with the original file.

The plugin will leave the original file (attached to user A) and create a new file that you can attach to user B (but it will be two files)