My mother's family was similar to this a few generations ago, 4-5 generations used to live in one house in Midwest USA. Their home spread from one city block to another. That said, I cannot imagine living in a <2500 sqft home with my parents and my significant other. My SO would go Thunderdome on my Mom and my dad would be freaking out on the sidelines.
I have a coworker who is engaged, he lives at his parent's place and his fiance lives at her parents place. As someone who lived without my parents (even if it meant having roommates) since 18, I cannot at all understand long term living with parents.
Communal family living was a thing in the past because modesty, temperance, and christian values were expected norms. If you want to be a puritan, or don't have familial shame, then do whatever you want. For me, I'm gonna have my privacy and peace.
PS: My coworker can't spend the night with his fiance because her parents are mega religious. He can either sleep on the couch or go to his parent's place. Likewise, his parent's won't let her stay overnight at all because they aren't married.