Okay - so, if I were you I'd wait a bit before sending the AirTags back and going back to using Tile.
There is a really good little video with a demo of how the privacy stuff works in another thread on this Forum:
Wondering if anybody can further clarify exactly how the alert for an Airtag potentially tracking/following a person alert system works, or how people feel about how we believe it works at the moment. As an experiment, I gave my Airtag to my son today, while he went a walk into town for a...
forums.macrumors.com
Looks like Apple really has thought about this a lot and that some of the mechanics of it are deliberately not obvious to deter people from easily doing bad things with AirTags.
As the journalist in the above video says - she has been using Tile for ages and never thought about how they could be misused. And more importantly, looks like Tile didn't put any thought into this.
Apple has come up with a typically Apple solution. The mechanics are meant to "just work" rather than people like us pre-setting stuff.
So, the answer to my original question of where the instructions are to enable Family Sharing for the AirTag are is:
there are no instructions because this setting will only appear once the Airtag has been found tracking another person. At that point that person will be given the option to effectively tell the AirTag "it's okay, this AirTag is safe, don't alert me ever again about it". And by doing it this way around they get a chance to make a decision about each AirTag that they might find on themselves.
So, I will re-enable the Item Safety Alerts on my wife's iPhone and just see how the system works in real life.
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I think what suddenly struck me is that Tile didn't address any of this stuff.
Also, in my experience the Tile often didn't work at all. As teardowns and X-rays of the AirTags are showing they are a far superior product.
So, my advice is to give them a chance and see how they actually work in real life.
And in answer to the problem of which AppleID they are paired to - yes, they seem to work best if they are on the same AppleID. But as they can be viewed on a MacBook in the FindMy App - it would be possible for any member of a family to find another family member's stuff by logging into their AppleID on a MacBook.