I am having the same issue too. I know for a fact I know what I am doing, as I have done it quite a few times and am familiar with the process. I am both the one creating the album on one side, and attempting to accept it on the other. I have recreated the folder several times. I have tried to add people to folders that already exist (they just never get the notification). iCloud Photo Sharing *IS* broken. This is an apple issue, not a user/keyboard interface error.
I would like to know when this will be fixed. It is very frustrating trying to use a service when I pay extra for additional iCloud storage, only to not be able to use it due to apple's error. A prompt reply would be appreciated.