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It's a remote access tool, allowing the other user to act as if they sit right before the actual machine. It would circumvent almost all of Steam's security precautions besides the Mobile Guard.
thats not a 'good' friend' seriouesly wtf is wrong with kids these days
No one, I can't even tell you whether you should do it or not. If you really trust him, go for it. Just remember, I believe he would need your password, and you would need his to access the family sharing option. Just use caution on whatever you decide to do.
As for how the feature works? Pretty much, if you own let's say game A. He would be able to play it from your library, you wouldn't be able to play that same game from your library until he is finished playing it. You'd be giving up your password, which is something I wouldn't do, and I personally don't think you should either, but if you do decide to do it, good luck and best wishes!
This should fully explain it.
As soon as the one providing the shared game plays ANY game, the other user is kicked. It's not locked to games, but to the whole library.