There appears to be no good answer for this after several minutes searching: After creating a new user on the Mac, new user changed default screen shot settings (un-checked "save to file", leaving "copy to clipboard" selected for both full screen and partial screen options).
The tool completely broke - the command keys CMD+Shift+3 and CMD+Shift+4 no longer work. There is no screen shot tool cursor, no camera noise, and nothing copied.
Restoring the defaults and re-booting did not help. Repairing disk permissions also did not help.
Does anyone have a fix? The user literally uses this tool several times a minute - "grab" is too clunky to be a good alternative.