SOLUTION:
1) Delete the Apps that you are having problems with (I assume you already did that)
2) SIGN OUT of your (wife's) iTunes & App Store account on the phone where see the error
3) SIGN BACK IN with the same account under Settings > iTunes & App Store
This worked for me after I started to see the same issue upon activation of Family Sharing. Odly all those (free) apps had disappeared from both of our purchase histories and could not be downloaded again. However, a sign-out & immediate sign-in on the iTunes & App-Store settings section of the troubles iPhone resolved everything