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Is that allowed? Don’t you have to be at the same address or something?

Don’t do it, the huge caveat is the plan owner pays for all store purchases.

That's optional.

Not as far as I’ve been able to discover.

Purchase Sharing is at the bottom of the Family Sharing preferences.

Yes this is false. It was like that in the past, but you can separate purchases and just share the apple one.

Not at all