I see that there are a few instances where this plugin could be a bit confusing especially when it comes to new user registrations and they username they are trying to register already exists.
How about developing something that will allow the users to register & login from a master site, just like Yahoo or Google does. For e.g. if they login to a site 1, then they will be logged in to all the sites in the network and if they logout, they will be logged out from all the sites in the network.
Alternatively, it can also be made that the plugin won't accept duplicate registrations at all.
In my opinion, sync concept can be easily misused or abused if its not properly setup. For e.g. someone may want to register with the admin account to hack the site.