There are multiple ways to approach the sharing process. One of those methods involves the despicable HomeGroup. This method I will ignore, as it is incompatible with some versions of Windows (looking at you, XP).
My preferred choice is to create a new password-protected user account on the machine with the shared folder. The account credentials can be shared with those people that need access without creating scary HomeGroups. On W8 and later, user accounts are (often) linked to online IDs (ex. hotmail accounts) during installation. It is possible to log in with these online IDs as well as user account names. On earlier Windows versions, linking an online ID is optional (and I could not confirm that it works for Windows XP).
To use this method of sharing, it is important that both the host and the guest have set their preferences properly. This is done in the Network and Sharing Center (or Centre, depending on your localisation localization). Technically, it is not necessary for all the options to be turned on, although it is easier to just enable all the options under Advanced Sharing settings. Public folders and media streaming are not necessary. For the host, Network discovery is not technically necessary, but it does not hurt to enable it. 'File and printer sharing' and 'Password protected sharing' should obviously be enabled if you want to do password protected file sharing. 128-bit Encryption is recommended. The last option is very important: Windows cannot be allowed to manage the HomeGroup connections! User accounts and passwords must be used to connect to other computers using user accounts. These settings should be used on all computers that want to share a certain file or folder.
Now it is time to select the files and/or folders that should be shared. This too can be done in multiple ways. One of those can be disabled in settings, so it is a good idea to check that: go to Folder Options, View tab and make sure that Use Sharing Wizard is unchecked. If it is not checked, excellent! If it is, uncheck it. This Wizard is limited in its functions and we are Power Users after all. The proper method to share a file or folder is by right-clicking it, choose Share with..., Advanced Sharing. In this menu, check the box Share this folder. You can choose a name for the shared folder, which is the name that will be displayed when people browse the Network through the explorer. Adding a $ behind the name will hide it from the explorer. The value of this tool is purely esthetic, the folder will still be accessible to everyone with the proper credentials by browsing to the path directly (either by folder name or local IP).
Of course, we do have to set Permissions. Add the local user account of which you shared the credentials and set its Permissions. If you are lazy, you can click Advanced and let Windows Find all the accounts that exist on your location. Since it is possible for the local administrator to access all folders locally, it might not be necessary to add the group Administrators to the list. I find it convenient to be able to access my shared folders from my admin account by browsing through Network.
For every object that is added to the list, you can change the Permissions. To make sure that people do not use my hard drive to store their pr0n important data, I set the permissions to Read only.
The shared folder can now be accessed from anywhere in the Network, provided that they have the credentials. Should you have issues with network discovery remember that shard folders can always be accessed by directly giving the proper path (ex. \\ComputerName\Shared Folder or 192.168.1.x).
'Why does this matter?', one might ask. That indicates that 'one' is not familiar with the KB numbers of these updates. These updates are the dreaded ones with vague descriptions that make the Windows 10 Upgrade pop-up pop up. KB3035583 is an especially bad one because it is automatically installed if you are unlucky: its importance is listed on some PCs as 'Recommended' and 'Recommended' updates can be treated as 'Important' if one was silly enough to leave that setting enabled. Apparently, I am unlucky and have been silly. And, as it turns out, I am no longer the supreme ruler of my own PC.
'Okay, so what? Did you write this post just to tell us about your problems?', one might reply. Well, no. This post has 2 goals but bothering people with my problems was not one of them. That is more of a side effect.
Goal #1 is to make sure I am not crazy. I was 99.9% sure about my update settings, but this post will serve as written proof of my settings. I want to be asked before anything gets downloaded and have adjusted the settings accordingly. The second goal is to make a quick list of updates that I will never install on my main PC:
KB2952664 - "Makes improvements to the current operating system in order to ease the upgrade experience to the latest version of Windows." Whatever that means, I do not need it for I will not be upgrading.
KB2990214 - Labelled as 'Important', but for reasons unknown. It is an 'update that supports you to upgrade to a later version of Windows' and supposedly does some other things that Windows will not elaborate on. I have not been offered this upgrade but I do not want it anymore.
UPDATE: KB2990214 has been superseded by KB3050265
KB3021917 - Should be checking for compatibility issues (EDIT: as in, it should be checking compatibility of W10 with the machine). Fails miserably, my main PC is incompatible but it does not detect that fact (probably because it is only incompatible due to AMD's Crossfire and Eyefinity).
KB3035583 - The big bad wolf.
The rabbit hole goes deeper. This was posted today on the Tweakers frontpage. Not only does Windows automatically change your update settings, it then proceeds to install a new OS on your machine without asking for permission. If that does not qualify as invasive, I do not know what would. Maybe, if the compatibility test was failproof, I could accept this as a 'regular update', but this can pretty much break a setup. Fortunately, this was just an accident. An honest mistake.