I have set up TFS Security using Active Directory groups and in source control explorer through Visual Studio, users only see Team Projects that they have access to. However if they go to Team Explorer and click on the drop down menu they see almost all the team projects. If they go to web Tfs as well, the behaviour is exactly the same.
How do i restrict them to only see projects in dropdown that they have access to?

Project Collection Valid Users Group - Permissions

Project Collection Test Service Accounts - Permissions

Project Collection Service Accounts - Permissions

Project Collection Proxy Service Accounts - Permissions

Project Collection Build Service Accounts - Permissions

Project Collection Build Administrators - Permissions

--At Project Level--
All Project Valid Users group at Project Level are members of Project Collection Valid Users group


You need to add the user/groups to the specific team project but not in Collection level. Thus , the restricted user/groups can only see the specific team projects which they have permissions under the collection.
In Team Explorer you can select the projects which you want to connect/display.
Update:
Then the users in the group will can only access TFS with project permissions.