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The game is being shared, it's from YOUR library, it should not appear on his library or recently played, because YOUR License is being used.
I think the OP is talking as if another friend of his cousin would want to invite him (not OP) to play a game. Not the OP wanting to invite his cousin to play one of the games he is sharing to him.
Shared games do show up in Recently Played on the profile and in the tab where it list more than the last 3.
That tab where it shows more than last 3 only shows games that are played up to few weeks ago.
Any game You haven't played in past month are not in that tab
Also a warning when trying to launch a game while frnd is playing would be nice.
Like: "You friend is playing a game from your library. If you launch this game he will be kicked out from his game. Are you sure you want to continue?" Yes/No