Apples FTP server is a dog. Use Crush FTP. It’s $30 for 100 user and it rocks. The documentation and support is as good as it gets and it’s a breeze to setup the kind of thing you want to. crushftp.com
The problem is in the way AFP talks to OD for user auth info I’m pretty sure.
FWIW some claim various solutions which don’t work for others. For me I had problems with Kerberos not starting due to a DNS config error. Now that Kerberos is running I haven’t had AFP fall over for days now.
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