I wrote a blog about it last year with my method of deduplicating. I really need to update that bit because steam keeps writing files that don’t uphold the group permissions, and others get permission errors that need to be fixed by admin. Steam also failed to determine free space on a drive when symlinks were involved.
I even found recently that steam would write files in /tmp/ as one user, and fail when you logged in as another user and tried to write the same file. Multi-user breaks even without messing around.
My current solution doesn’t use symlinks. I just add two libraries for each user. One in their respective home directory, and another shared in /mnt/steam. It means that any user can update a game in /mnt/steam, and it cleanly updates for all users at once.