Apparently you consider both 2 and 3 ethical, and your ethical company is at least expanding to 2. In that case, your ethical standard is just very different from many (most?) of us; we classify 2 and 3 as “shady as fuck”, and 1 as questionable.
Most of these free VPNs rely on people not reading the agreement, and even when it’s made fairly clear, rely on people not understanding the true meaning of sharing their connections. Don’t get me started on the SDKs. I’m not accusing them of tricking users because I didn’t bother to expand on the topic.
Some ISP terms are more reasonable than others. Not running a commercial data operation on a residential contract is one of the more reasonable ones; they clearly have commercial contracts available, you know why people who run lease-your-upload-bandwidth-for-money software aren’t choosing them. Both the people running the apps and the ones encouraging them to do so are questionable here, and the former may not be fully aware of the consequences (I personally know someone who got throttled then eventually banned by their ISP this way) whereas the latter would know.
Btw, no I don’t pirate movies (I do sometimes torrent content I already bought because I don’t like the official player). Again, your ethical standard is different from mine, and mine different from people who don’t torrent at all, for instance.
Shady okay, but I think your line about ethics being "very different" is going too far. "Here is a free VPN that will use some of your bandwidth for other people's connections." is a pretty fair trade. And you don't seem to be accusing them of hiding things or tricking those users, but saying a deal like that is inherently objectionable.