Reasons to avoid MS365 license sharing:
1) For Microsoft 365 Business Standard (formerly known as Office 365 Business Premium), each user needs their own license. It is not permitted to share a single license among multiple users. Each licensed user is allowed to install and use Microsoft 365 Business Standard on up to five devices (typically a combination of desktops, laptops, tablets, and smartphones) for their own use.
To obtain the most accurate and up-to-date information about Microsoft's licensing terms and conditions, I recommend visiting the official Microsoft website or contacting Microsoft directly for the most current information on their licensing policies.
Reference: Microsoft Product Terms - https://www.microsoft.com/licensing/product-licensing/products.aspx
2) The cost of being audited is higher than the cost of just being compliant.
3) Everyone is able to see, edit and delete documents belonging to another user under the same license (OneDrive)
4) Everyone is able to see recent documents in Office suite programs (Excel, Word, etc.)
5) 2 people using PC + Mobile phone for their apps already use up 4 devices out of 5 allowed. All new logins from 5 devices up will kick out older logins to the account and creates issues when using Office apps.