I've discovered that the problem relates to the @ in the username. If I change the character to anything else (such as !) then things work perfectly as they did before.
It doesn't matter if I escape the local part or not the problem still remains. Is this a problem with the 4.1.0 release given that the previous 4.0.4 release didn't have this issue or am I doing something wrong in how I setup the account via the Users plugin?