File system browsing utilities will only work when your device is unlocked, which will greatly improve security, so require access code protection for devices running the application. This can be done for internal corporate applications where data is extremely valuable, I believe that it should also be approved by Apple.
To find out if a password has been set, you will check the security attributes of the dummy file you created in the permitted location: fooobar.com/questions/145827 / ...
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