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This much I know and I use it often but I'm not going to make a 6 year old an account and share my games with them. It's inane especially when they're on my computer. It makes much more sense to have a guest or kiosk mode. You can even do this on consoles just by not logging into your account. Most games will still play but they can't save or make a mess of things.
I would think that the guest account wouldn't be able to play most multiplayer (competitive) titles just because people would abuse it and cheat using a guest account that could never be banned. But casual titles especially those aimed at younger audiences might not care so much.
If this is still on your system, simplest way would be to log into your own account and not walk away from the system while they are playing.
Most of this stuff is if you are family sharing.
1) Steam games that have steamworks in them are designed to use SteamIDs. Not using SteamIDs could easily break these games and there is usually no game devs left around to fix issues like this and publishers are more than likely never going to hire someone for an old game to fix the issue (and this is not up to Valve, its 100% up to the publisher of the game) so this is never going to happen. There might be many more games that don't use Steamworks at all, but still require the SteamID integration.
It would also make for banning people from games and game servers impossible without some sort of ID to connect them to an account. Yet another reason why this will not happen.
2) Don't let people play your games who you think could cheat or has someone in their home that could cheat. In other words, don't lend out your account to people you do not trust or better yet at all. If they are on your system, don't walk away from your system so they don't have a chance to download a cheat.
3) They have to be able to change some stuff for it to work on their system. Your settings might not work on their system. If they are on your system, tell them to get used to your setup.
4) See #3
5) Or you do not lend out your account to others, or you do not walk away from your system while others are sitting there playing games.
And no I do not see a reason for a "guest" mode.
This is exactly why what you are asking for does not exist. People would simply go into "guest" mode, cheat and not have to worry about a vac ban.
In guest mode you wouldn't be able to play on VAC secured servers at all.
And for some games, the whole multiplayer would be disabled.
This way he/she could leave kids playing without worrying that they'll cheat or grief in multiplayer games.
Since with family share the person is already saving things on their account and not yours. If a game doesn't separate by steam account, that's an issue of the game and not necessarily one of family sharing.
And yes, family view solves a lot of the other parts of your suggestion.
OP could create new account, name it Guest and family share to it.
And then from main account restrict access to VAC secured servers or whole multiplayer.
And apply restriction to the whole library or have blacklist/whitelist for specific games
Tell your relatives to create a new Steam account. All your problems solved right there.
Guest Mode:
Turn on to disable a few things:
Chatting
Playing on servers with an anti-cheat system
Forum posting
Buying/refunding/selling stuff
Type your password in again to go back into non-guest mode.
Don't forget no trading