The "Shared With" column displays users who no longer have access to a document in SharePoint Online
Why is this behaviour by design? confusing is an understatement - please sort out (you could create another column called 'previously shared with')
Yigit Yürüker commented
This is ridiculous! This column has to be dynamically updated, otherwise, it is just useless. Nobody thought about this over 3 years?
I agree, it is confusing to see names of people who no longer actually have permission. Especially as there are several people managing a document library one person cannot easily tell if the permissions have been updated. I have a document library with permissions that change fairly regularly (by design) and it is helpful to have a quick way to see who is the current person responsible for a folder or document.