Close. I don't think MS was going to be "only one person can touch the library at once" - I thought it was going to be on a per-game basis - but we didn't get far enough to get those kinds of details before Microsoft reversed course.
Microsoft's messaging was muddled on family sharing (and everything else about the Xbox One). Some interviews suggested you could share on a game-per-game basis, others suggested it was the whole library, like Steam is doing. I got the impression that MS hadn't worked it out themselves yet and were still working on the details with publishers, but they were in such a PR nightmare at the time that they threw the idea out there so that they could say something positive about their platform at E3.
I might be wrong, but I'm pretty sure the German government has already told them that they have to, at least so far as their own citizens are concerned.
Not Steam specifically, and not limited to Germany. The case was brought against Oracle to the European Court of Justice, and the court ruled that software licences could be legally resold within the European Union. On the back of that ruling, a group in Germany is bringing a class-action suit against Valve to try and force the ability to resell Steam games. If the case makes its way to the ECJ and is successful, it would apply across the EU.