I see this bug show up at times and I think it should be fixed before the 7.2 release; it is a minor bug and I guess I could do a ticket on it.
Default profile albums are hard coded to set the privacy to public. If one does not use the Public privacy group, this causes an issue with the display of the content; member can see their own content but not the content of other members even though the privacy is set to members. This is because the public privacy group is not enabled. If one is not going to have public content on their site then they should not be forced to enable the public privacy group.
The best solution for this is to have a setting in admin that sets the default privacy group for the profile albums, filter the list based on the privacy groups that are enabled on the site.
