Hello Justin
When you specify the security level in the following command
R1(config)#snmp-server group MYGROUP v3 priv
you are specifying that SNMP packets will be authenticated and encrypted.
When issuing the command:
R1(config)#snmp-server user MYUSER MYGROUP v3 auth md5 MYPASS123 priv aes 128 MYKEY123
you are specifying that the user will indeed use the User Based Security Model (USM) for SNMPv3 that has been configured in the previous command. The priv keyword in the second command is not the same as that in the first. In the first, you have the option of specifying auth, noauth or priv while in the second command you either include the priv keyword or you don’t. If you use the priv keyword, you then must specify the encryption method and key sizes.
Take a look at the following two command references from Cisco:
snmp-server group:
snmp-server user:
I hope this has been helpful!
Laz