Ally shared hero

Looks like it's the highest power unit you own.

I think it's your ally's leader character for a given campaign

Was wondering the same. My guess is your current/stored squad leader for the campaign/table is offered up for light/dark/neutral. A great way to figure out is to let an ally know which of theirs is being offered up and they can confirm. Of course, if someone who actually knows the answer, say from EA, could just explain...lol

The other question I have: I currently get to use an ally character even though I have no allies. Does this change at some point (level, add allies) and if so are you limited to only allies' characters?

Can a Dev please explain this mechanism? It's obviously unclear. Is it just your highest level character? Your squad leader for each section (so you can borrow more than one)? Or something else entirely?

No need for this confusion, there is.

Ally character availability question answered, mix of allies and non allies for use.
Which character seems a little random but likely based on light/dark, status in squad lineup, or power/level. I had a list with three characters from one player so either random or several criteria. Would be nice to know how it works but nothing to lose sleep over.

Yeah it looks random within a range of valid options available from that player.

Don't think you can really control. Yes, it's rather random and some AI generated.
I had a list with 3 different characters from same player, also a list with a 2* and 3* Vader from same player, and a lvl 49 with a 2* Barriss.