Considering that Netflix’s ToS and Apple’s Family Sharing both say that they’re only meant for people in the same household, I don’t see “Apple might fear getting sued” as an issue.
Where do you read that for Apple’s services? Reading the “Apple Media Services Terms and Conditions” (at the confusing URL https://www.apple.com/legal/internet-services/itunes/), it doesn’t mention household, always spells “Family” with a capital letter, and as far as I can tell, only mentions these restrictions on who can join a Family:
“Family Sharing Rules: You can only belong to one Family at a time, and may join any Family no more than twice per year. You can change the Apple ID you associate with a Family no more than once every 90 days. All Family members must share the same Home Country”
