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Kakadu18 said:

I just checked the website and it doesn't say anything about the members of a family subscription having to be an actual family or live in one household. Nothing of the sort is said anywhere. It just says that up to eight accounts can be part of it.

So Nintendo is using the Vin Diesel definition of "family"?

Currently Nintendo doesn't explicitely include or explicitely exclude other people than blood relatives as "family members" of a "family group".

So even if they tolerate it for now, they can alter the deal in the future and exclude non-relatives.

It's a grey area, just like emulating your bought games on other hardware.