Permissions will be carried over fine, normally what I tend to suggest is that you create a standard archive for the public folder ,and not an auto enabler, if you use auto enabler then you will have an archive for each seperate subfolder
So in my environment i have
\myRootFolders\Test1_1\Test1_2\Test1_3
\myRootFolders\Test2_1\Test2_2\Test2_3
I target \myRootFolders as a standard archive that goes to an archive called "Public Folders"
I add the VSA account at the root folder and give it full ownership
On \Test1_1\ and below i give UserA permissions to have Author
On \Test2_1\ and below i give UserB permissions to have Author
On \myRootFolders i give both UserA and UserB "view folder" permissions
Then when i log on as UserA i can only see the \myRootFolders\Test1_1\ and below, and UserB can only see \Test2_1
Enterprise Vault is very good at matching permissions set in outlook, i have never seen it to where Users can see more in the vault than they can within outlook.
The reason for not using auto-enabler is in the above scenario i would end up with 7 archives (one for each folder) where as just having the one archive is better