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Steam :: Introducing Steam Families
(steamcommunity.com)
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Sadly it doesn't seem to add the possibility of whitelisting/blacklisting games. I do not want to share porn & VAC games, not even with adults, since the bans are shared to the account actually owning the game.
You can mark games as Private in your library now. It hides your ownership, play stats, etc. It doesn't specifically say it disabled Family Sharing but it'd be silly to keep that. There is also a Hidden Games section which stops it from showing up on your list.
https://help.steampowered.com/en/faqs/view/1150-C06F-4D62-4966
Edit: I just tested it with current Family Sharing (not this beta version). Both Hidden and Private prevent games from showing on another shared account.
You can mark a game as private and it won't show to the other family members. I verified this just now after signing up for the beta and setting up an account for my spouse. The games I marked private don't show up on their families library.
When I found this out years ago I booted everyone off my family and haven't added anyone since. Ain't trying to catch a ban
That's only for VAC games, right? The historical advice given by modders is to share your library, and use another account to mod it. If you accidentally login to the online portion of a game with a mod enabled, only that account is banned not the library owner.
This specifically says that getting banned on a shared account will also ban the owner who shared the game. Likely to prevent exactly what you described, where people could evade bans simply by sharing their library with a throwaway account.