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That worked but for different reasons. In the old system it was because you had to "authorize" the PC for family share and register it in Steam.
With Steam Families it works because when you send out the invite Stean checks if the receiver has any history with you , either by sharing a name, address, play or purchase history.
If none of that is present now or in the past you get the error that you dont appear to be from the same household.
By logging into your PC with their accout it now seemed to Steam that you are living at the same location since your login history shows the same place. And thus the invite works.