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It works in the same country.
Piracy is not the answer.
Same house not needed, but same store region. Otherwise people suddenly discover long lost relatives who just HAPPEN to live in cheap countries.
The old system was made to support that either. It only worked one-way by exploiting IP addresses. Something Valve have never allowed as per their SSA. They turned a blind eye to it until people started abusing it. Now, they enforce the same country limit and further define that a family is a unit of people living in the same house (or at least, the same country).
And your immediate turn to piracy tells me that you're one of those people who abused the old system.
also the old share settings seem to have been completely removed from the client, now that tab is just for the new
To authorize Family Share you had to login into that users PC with your account and activate Family Share.
And i doubt less then 1% actually visited their friends/relatives in another country to do so but gave them their login/password which already was a breach of the Steam TOS.
Then people started to make accounts in countries with cheaper prices and share that account to their main, then they started to sell those accounts on third party sites and so on and so on.
In the end every stricter revision of a older system on Steam comes down to the previous version being abused on a massive scale.
Shilling is getting paid for it. Agreeing because it makes sense given the circumstances isn't shilling.