Sharing an account with people outside your household was common, widely known to the companies involved, and tolerated for years. That changed, and the reason is straightforward.
Why it was tolerated
While a service is growing, a shared account is a future customer being introduced to the product at no acquisition cost. The economics favour ignoring it.
Why it stopped
When subscriber growth slowed, the same shared accounts became revenue that existed and was not being collected. Converting a fraction of sharers into paying accounts is the cheapest growth available.
The companies that did it reported subscriber increases, which guaranteed the others would follow.
How it is enforced
Household definitions based on the network your devices connect from. Devices that regularly connect from elsewhere get flagged.
Periodic verification, requiring a device to connect from the home network occasionally.
The enforcement is deliberately imprecise, because being too strict creates problems for legitimate use – travel, second homes, students.
What the rules usually allow
Travel, generally, with periodic reconnection from home.
Additional members for a fee, which is the intended outcome.
What they do not allow is a permanently remote household on one subscription.
Where else it is happening
Software, where per-seat licensing is being enforced more actively. And any subscription where usage can be attributed to a device or location.
The pattern worth noticing
Practices tolerated during growth get enforced at maturity. That applies well beyond streaming, and it is worth assuming about any service you rely on.