If security comes into the parents' room at night to check who is actually sleeping there, the OP could sue Hilton for far far more than the value of a Gold account and points balance.

Nothing of what you quote applies to this situation. Each Gold member is entitled to a guest. So you are saying that if I am staying alone as a Gold member (and am fully entitled to a guest), a friend also staying at the hotel is ONLY allowed benefits if they sleep with me, but not if they happen to have their own room. It's absurd to suggest fraud when elite members are entitled to guests...