Note that if $g_email_receive_own is set to OFF, developers will still not be notified of their own actions. Is this the case?

No, they can't see info-messages, when new bug was added by reporter, and have to check changes online. I, as, admin, receive all notifications

Is this a private or a public project?

What is their default access level, and their access level in the project? Are they both DEVELOPER?

Public project with default access level - reporter, developers are, well, developers :-)

@Wanderer:

if you don't want to get a copy of all emails disable $g_to_email

i had some problems with this feature too...
but i got it working with the following:

without this setting nobody will get an email!
$g_enable_email_notification = ON;

all notifications switched off by default (so i've to turn the wanted manually on)
$g_default_notify_flags = array('viewer' => OFF,
'reporter' => OFF,
'updater' => OFF,
'handler' => OFF,
'manager' => OFF,
'monitor' => OFF,
'bugnotes' => OFF,
'threshold_min' => NOBODY,
'threshold_max' => NOBODY);

an handler will get an email, when a bug is assigned to him or reopened (and this action isn't done by himself *)
$g_notify_flags['assigned']['handler'] = ON;
$g_notify_flags['reopened']['handler'] = ON;

all reporters will get an email when a bug is resolved or needs feedback
$g_notify_flags['resolved']['threshold_min'] = REPORTER;
$g_notify_flags['resolved']['threshold_max'] = REPORTER;
$g_notify_flags['feedback']['threshold_min'] = REPORTER;
$g_notify_flags['feedback']['threshold_max'] = REPORTER;

if you just want that a reporter gets an email when a bug reported from him is resolved or needs feedback, try this instead of the one above
$g_notify_flags['resolved']['reporter'] = ON;
$g_notify_flags['feedback']['reporter'] = ON;

• $g_email_receive_own = OFF;

i hope this will help you a little bit...
otherwise.. try this on your test-version of mantis (shouldn't use it on a version that's already in use):
add in the file core/email_api.php at the end of function email_collect_recipients(...) this code (before return($t_recipients);)

print_r($t_recipients);
exit;

then everytime there's an email send, you'll see the recipients, but NOT the recipient defined in $g_to_email.

I think this is caused by our unclear configuration options here. See 0003766.