Google has stated that content creators can indeed host their posts on others' subdomain or subfolder.
That isn't against Google's guidelines, but for long, the search giant was having difficulties in ranking them. But in an update, the company said that it is improving its systems to understand these posts and treat them accordingly.
The statement delivered via the Google Webmasters Twitter account, said that
"Overall, we’d recommend against letting others use subdomains or subfolders with content presented as if it is part of the main site, without close supervision or the involvement of the primary site. Our guidance is if you want the best success with Search, provide value-added content from your own efforts that reflect your own brand.” Google stated in a three-part tweet."
Overall, we'd recommend against letting others use subdomains or subfolders with content presented as if it is part of the main site, without close supervision or the involvement of the primary site.
— Google Webmasters (@googlewmc) August 14, 2019
This practice is common, and this is why Google is updating its algorithms to meet that trend.
First of all, third-party websites, especially those with high ranks, are interested in renting out their subdomains and/or subfolders to help others rank better for a price.
Other websites interested in hosting their posts on these third-party websites, can benefit in the competition by having better search ranking, which in turn would give them more traffic and conversion.
Google has had difficulties in dealing with this trend, as once explained by Webmaster Trends Analyst John Mueller during a Google Webmaster Central office hours session back in June 28, 2019.
He said that:
While this practice isn't violating any of Google's guidelines, but it can be considered a "workaround" to game Google's weakness.
For those who have considered using others' entities to host their content, they should be aware that Google is having an eye on them. Those sites won't get penalized whatsoever, but with this update, their attempt may not be effective anymore.
And for those third-party websites, things can get worse for them.
But for those third-party websites hosting low-quality contents on their domain, Mueller said, they may risk their entire domain’s search rankings to be affected.
"So, if there are particular parts of a website that are really low quality …. then overall, that could be degrading the quality of that site a little bit."