Non dojo users will need to recover elsewhere.

Dojo users are fine since they own the backend.

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“Recover elsewhere” means unable to send out of SW to a new wallet somewhere else?

Which is to say, instead, users must enter their seed in a different wallet to obtain access to funds?

Would there be a difference between funds that are on the poolside, versus those on the normal side?

Yes, enter seed and passphrase into Sparrow and youll see all accounts, pre and post mix.

Just FYI, the process for setting up in Sparrow was to import my backup.txt file