I have always thought living people could only be seen by those who put in the names. I have just been contacted by a distant relative and when comparing our trees, all her living family members are listed.
Has that policy been changed?
That policy has not changed. Your distant relative has entered her living relatives, either as living and in her private tree space or as deceased and in the public tree space.
Here is how to correct profiles of persons falsely marked deceased: Edit the profile to change Deceased to Living, and follow the prompts. FamilySearch staff will investigate and take action. The usual action is to move the profile to the private space of the contributor who created the profile. Your correction will not be revealed to the contributor.
Here are a few articles from the Help Center (circle with a question mark to the right of the navigation bar) that might be helpful:
Who can see my living relatives in Family Tree?
How do I see a list of living and confidential people that I added to Family Tree?
was the problem that they had been (erroneously) marked as deceased?
or do you still think you are able to see deceased people that someone else entered (that are NOT marked as deceased)?