The idea is to completely remove role_assignment interface at the course level, we already have enrolled users UI which allows users to assign roles and groups.
The only potential problem is how to remove course administrators and other system wide people that teachers should not see.
The current logic is in other areas is:
1/ course participants page (/user/index.php) that is the page where both teachers and users see other course participants and their roles, we should only people with profile roles specified in $CFG->profileroles (usually tacher, editing teacher and student role); separate groups are in effect
2/ enrolled users UI (/enrol/users.php) this is intended for editing teachers only with right to see and usually manage all course enrolments
There is already a stub file in /enrol/otherusers.php - I suppose we should create a new capability which grants access to this information.
1/ view all users in course or parent context
2/ add and remove roles