Restrict the usernames that new users may use when registering for your site.
No. The plugin only prevents the usernames visitors can use when registering for an account. An admin that has user creation privileges can still create a user account, from within the admin, using any otherwise valid username. Username restrictions don't apply to admins.
= If I specify restricted usernames and a required username substring, must all criteria be matched by potential usernames?
Nothing happens to those accounts. The plugin does not do anything with existing accounts. Existing usernames are not checked against any username restriction rules; that only happens for accounts being newly registered.
Yes, for at least BuddyPress 1.2+ and 1.3+, and perhaps other versions.