Oops, I just refined my search and I found this:
"Anyway I'll post here a small HOWTO for password protected folders.
1. Under default skin go to Access Menu -> WebProtect (Password protect directories)
Under CpanelX just click on icon with key "Password protection"
2. You'll see a folder tree. Select a folder you want to password protect.
3. Click on checkbox near lock "Folder requires a password to access via http://"
4. Type in field "Protected Resource Name:" short description of what is contained in the folder (one or 2 words)
5. Click on "Save" button.
Now when folder is password protected you can add edit/remove users:
To add users:
Just Type username in field "UserName" and password in the field "Password" and press "Add New User" button
To chane a password:
Just Type username you want to change password for in field "UserName" and new password in the field "Password" and press "Change password" button.
Do delete user:
Select a user from the active users list and press "Delete User" button "
So obviously you do support password protected directories.
Thanks for the help lol