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From the steam family sharing FAQ

Can two users share a library and both play at the same time?

No, a shared library may only be accessed by one user at a time.

My question is while two people can't play games at the same time. Can one person play a game while the other who owns the game be logged in?

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can both users be logged in while one is playing a game?

Yes, the game's owner being logged in does not prevent other users from playing the owner's shared games.

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