Users are able to select any product in a custom lookup field
|Knowledge Article Number||000004361|
Organization has a restricted sharing model for price books. However in a custom lookup field to the products object all users are able to select any product.
Products do not have their own sharing settings, only price books do. So if you use products without the price book functionality (as you have to when creating a custom lookup to products) you will lose the sharing functionality that you get with products and price books. Thus all users will be able to access all of the products.