If a family member gets banned for cheating while playing your copy of a game, you will also be banned in that game.
This sucks.
Yeah, but I an see why as it would be easy to abuse. Only need one copy of the game and you could cycle accounts that never owned the game out of the family sharing when they get banned.
Might be other ways to limit that, but would also likely need more restrictions on the feature that might be more annoying.