Yup, both Bob and Charlie "stay at home." Who's home? How is it paid for?

Bob and Charlie are living rent-free in their parents' basements. Alice could have done the same—and will, if she has to sell the house to avoid bankruptcy—but she wanted to appear more independent. Alternatively, she could sell the house, pay off the remaining mortgage, and use the other $100k for rent until conditions improve.

No one in this scenario likely to end up homeless in the near term, as they all have roughly equivalent net worths over $100k. The system just favors those with their assets tied up in housing rather than more diversified investments or liquid savings.

Again, not seeing why it shouldn’t.

By subsidizing home ownership the government is encouraging people to go into debt and funnel whatever savings they manage to scrape together after paying interest into a single depreciating asset rather than a safer, more diversified portfolio. The policy is beneficial to moneylenders and people selling houses, but these things hardly need to be subsidized.

Bob and Charlie are the responsible ones.

Alice can sell her house for 200k and have 100k to pay for rent and live off.