Re: [NEEDS INPUT] Only one guest can be invited to stay the night
This option I think is part of base game and is a event gameplay feature, so only one sim can spend the night at a time. The game can only do one event at a time.
A good example is one of my sims a teenage girl named Clair, had a Date at the community park in Willow Creek, when they got there the Date spawned with her and her date, plus her brother spawned there because it was the same place as their club activity, even though he was not part of the social event Date, he could not leave the lot because of a active social event going on.
spending the night is treated more like a social event. However you can take turns.
So I am guessing this is "By Design."