Right - so to all the people having the Family Share issue (i.e. more than one person sharing the game = crash after fifteen minutes), I've spent the afternoon talking to Microsoft and have some answers.
Basically, the digital policy allows a Microsoft game to be shared with one person. So anybody with a digital copy can share Sea of Thieves with one other person. If you've bought the game and want to play with a 'family' member, you can both play at the same time, from different households.
HOWEVER. If you share the game with more than one, whenever an additional player joins the game it will crash every fifteen minutes. Microsoft says that when a game is shared more than once, a licensing check will recognise the additional player and cause the game to crash. Hence why so many of us are having issues.
In short. Family Share should officially work fine with one other person - if you're still having an issue doing that, set up a ticket. Any more than that, and it'll crash every fifteen minutes or so.
Microsoft have said they're going to try and post some official information about this, to clarify the policy. It would be handy if Rare could do the same on this forum, as I know lots of people on here and Reddit are having issues.