Symptoms
I use the standard denallix vm that is upgraded to 4.6.9
I've used this script to generate a number of users:
https://github.com/K2NE/K2NE.Scripts/blob/master/User Generation Script.ps1
I've now used my browser and went to:
https://k2.denallix.com/k2api/api/user
This will retrieve all the users, however, this is quite slow and takes up a huge amount of CPU load.
It's quite easy to overload a K2 server this way.
I'm not sure if any mobile app actually uses that list without filtering, but i think there should always be a filter on that.
Diagnoses
I have reproduced the issue and it was exactly as described in the ticket details
Resolution
Our labs team have logged it as a TFS item and it is currently being investigated.