You're being ridiculous and also rather sanctimonious. They allow 10 devices. What single individual has 10 devices?! No one. So what is their intention is allowing 10 devices? To allow families to use apps in exactly the way the OP is doing.
Care to offer another explanation?
Sure. One can own 10 iDevices. Your explanation is making stuff up. Apple says nothing about "family" licenses. But I can have a couple of iPods, iPads, iPhones, especially different versions for different purposes. That use is explicitly allowed. The use by my "household" members is not.
My explanation is a plain read of the terms of use, not wishful thinking.
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.And this is what I have been saying all along: fair to use with immediate family no matter how many (of course use your reasonable judgement as to how many would be "fair") and you cannot do the same if you are running a commercial app or commercial services with that app.
And where does it say "immediate family"????