My experience has been not only does the one companion get the luggage (the rule as written), but up to 4 companions get luggage. However, this was a flight in December 2013 and rules and policies change. (5 people, 7 bags).

Back when status could be inherited (March 2015, just before the change) 3 people in my family all got a free bag on an itinerary on my miles.

I think you are reading too much into it. I think it is saying the usual rules apply on award tickets if you cover the taxes.

EDIT: This was the Club card hence more than 5 bags for 5 people.