If I'm understanding correctly, you've created new Authors and new Posts using those Authors?
I attempted to re-create your situation and had no problems. I received follow up emails on all around (admin, author and the email used for making comments). Here are a few questions:
If you are not receiving the follow up emails, are you receiving them with your admin email? If yes, check your author's spam folder. If no, check in your Discussion settings to verify you have checked the box for "Email me whenever: Anyone posts a comment". By default, WP emails the Admin AND Author. I just recently learned this (like most, I assumed it only emailed the admin). So you will need this option enabled.
On the main settings page for the plugin, it will show a list of users subscribed to the posts. Is the author one of them? Also, visit the post logged in as the author. Underneath the comment box where it gives subscription options, it should say that you are subscribed.
Assuming you are subscribed, it is only a matter of receiving the follow up emails. So check your Discussion settings and your Author's spam folder.