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OWNER RIGHTS (NTFS) and locally administrative accounts

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If <local system>\Administrators owns an NTFS object and an OWNER RIGHTS ACE:Modify is in that objects DACL... what happens when the object's DACL does not include another ACE granting <local system>\Administratorssome other rights? Will <local system>\Administrators be stuck with Modify rights and be unable to change permissions on said object?

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