And streaming services realize that a lot of people use it that way, so they have nice individual profile functionality within a single account, so my shows and my recommendations don't get mixed up with those of other people using the account. Not every single streaming service had that feature at the beginning, but by now iirc they all got it.
You are correct, I think it is one of those technically grey areas. However in my scenario, given that the same group of 5 shares pretty much every single service subscription and physically spends a lot of time watching it together, I think, even in the intended spirit of household sharing, it sorta follows.
Regardless of that, imo there would be a lot of outrage if streaming services started cracking down on that, and, my guess, streaming services are intentionally not letting that happen.