Strictly according to the programme T&Cs the Bonvoy member has to stay *and* pay to get the benefits so you are not correct because the payment (in points) is being made by an elite member who is not staying and the elite member who is staying is not paying (because payment is being made with the other member's points so there's little room to manoeuvre here).

However, many hotels will act benevolently in this situation if they are asked nicely and grant some benefits to the elite member who is staying like a room upgrade, breakfast, or lounge access. What's less likely is that either of you will get night credits for this stay but you may do if the anomaly isn't caught by the IT.

Bottom line: no harm in asking and being grateful if the person staying does get some elite benefits but they are absolutely not entitled to anything and some hotels will take a hard line on this and there's nothing to complain about if that's the case.