When we visit a Priority Pass lounge or restaurant they record the Visit -and- the number of Guests (additional people). If they report fictitious Guests they will receive a higher payment from Priority Pass, and these costs may be passed through to the member, depending on the contract. It sounds as if the sponsoring bank waived the Guests fees.
How does the 'bank' waive the fees? The bank does not run priority pass.
In terms of guests most people here on FT could care less, given they do not pay fees.