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No. It was designed this way specifically so people aren't loaning/renting their libraries out.
No it did not, it NEVER worked that way. From day 1 it was always designed to only allow one person on at once.
Here is the press announcement when it came out
https://store.steampowered.com/oldnews/11436#:~:text=Once%20a%20device%20is%20authorized,his%20games%20at%20any%20time.
Maybe I'm remembering it wrong, but I'm almost certain I had Steam family sharing set up for my wife and son for a very short time during the Beta, and it allowed them to be playing a different game while I was playing.
Maybe it's the Mandela Effect at work here, since a lot of people seem to remember simultaneous use of a library as long as users were playing different games, but nothing I can find on the Internet seems to suggest this was ever the case, even during the beta release.
Doc and Marty been messing with the timelines again.
As much as I remember from the beta it was one user can access the library at a time
A lot of request to allow it per a game where made then and come every so often even that its not likely to change