From the documentation:
Turns on LDAP authentication for this configuration. This means the configuration will be taken into account when synchronizing and authenticating users. After turning on Use Ldap User authentication for at least one configuration, users cannot login on the system with the credentials stored in the application, except when they have the user role MxAdministrator.
Are you sure the field is set to enabled? And do the users have any user roles, if not then the users can’t login either.
From the documentation to map the groups to user roles:
3.6 LDAP Group Mapping
The Group mapping tab allows you to map LDAP group memberships to Mendix user roles. Click Refresh to load all available LDAP groups from the server. In the editor for a group, you can select one or more roles that will be assigned to each user that is a member of that group. When a user is removed from an LDAP group, the corresponding roles will be removed from the user on the next synchronization.