Q: Can't transfer albums from Photos to iPhone via iCloud

I'm not sure I'm not missing something here, neither of those images represent how albums are displayed on a phone.

Then it would seem that your Mac hasn't yet synced with iCloud.

Support are talking nonsense, all my albums are in perfect sync. However....

Some thing odd is going on with the library on your Mac, it's as though you have deleted everything from it somehow, I haven't seen that text in red before. Can you remember exactly what you have done.

I'D agree the problem seems to be on your Mac. It's almost as though you have deleted all your photos on the Mac and they are in the 30 day pending deletion period. I'm not sure how turning iCloud photos off and on again on your phone might cause this.

DO you see anything at the bottom of the moments page in the photos app, any message about uploading or anything like that.

Spiner wrote:

 

In the beginning of the whole story i once disabled Photo Library via iPhone>Settings>iCloud>Photos>iCloud Photo Library - OFF.

Are you sure you didn't disable and delete from Settings > General > Usage > iCloud > Manage Storage > iCloud Photo Library.

I was going to suggest you looked for an undo option. I'd be inclined to press undo, yes. I'd be hoping this allows the update (sync) between the mac and the cloud to complete.

Do you have a back up in place for these photos, it would be recommended at this stage that you do.

Do you know by any chance how do i share all my albums with my wife's phone?

You can create several Shared albums, independent of Family Sharing.  Create a separate Shared album for each of your albums.  See this Help page:                Create a shared album     

You can share up to 100 albums this way, see:  My Photo Stream and iCloud Photo Sharing limits - Apple Support