Where does File Sharing store SMB passwords
If you enable Windows File Sharing for a user in System Preferences > File Sharing > Options > Windows File Sharing the method to encrypt and hash the password is modified in the local node of the sharing host's directory service.

The file affected is /var/db/dslocal/nodes/Default/users/$user.plist. $user is the name of the user account you enabled in Windows File Sharing. If you enable several users all respective plists are modified.

Technical background: in addition to the existing authentication authorities another one (SMB-NT) is added. SMB-NT is considered weak.

You can get the current authentication authorities of a user by entering:

dscl . -read /users/$user authentication_authority #replace $user with a valid short user name


Usually you have to enable this for older Windows clients (Windows XP etc) only!