"This app is no longer shared with you." It's a lie.
My wife is trying to use one app that I have already purchased. When she does, she gets the message "This app is no longer shared with you. To use it you must buy it from the App Store". If she attempts to go buy it in the app store, after doing all the credentials stuff, it says something like "This app has already been purchased by some one in the family", but you can re-download it from the App store. When she does the, it works fine "for a little while". Sometime from 1 day to a week later, the cycle begins again.
We have made no changes to family membership. The device has only ever been signed into iTunes with her account.
To complete the irony, I'd happily pay the $4 again to the developer (with 30% to Apple), but it won't let me do that either.
iPhone 8, iOS 11.2.2