If they are sharing the same hosting account. I mean if 1 site has pages deindexed or have drop in rankings, will other sites also see the same, or will they be unaffected since they have a different domain?
There are millions of shared hosting accounts so the answer would have to be no. However if you host more than one site on a server/ip the penalization may also hurt those sites. I believe Google may use the Registrar info for MFA, link farms and other trash to search out and destroy the rest of the sites however don't worry about someone else getting you banned or penalized. Keep in mind there may be other factors that play in even with a bunch of crap sites hosted on the same server.
It doesn't affect at all. There are hundreds sites on the same server ip. It would be unfair if one site on the ip could harm other. So don't worry
Google penalty shall be based on domain or url, not based on IPs. But I'm just wondering will the penalty transfer from a domain to its subdomains, or from subdomain to domain?
LOL. Google's been banning whole networks for spamming - especially when spammers used subdomains of various blog systems, etc. to host doorways - not only domains, but IPs and even groups of IPs of a particular hoster were banned for certain period of time.
I can say this for sure that if a website is banned, links from it no longer have any weight and that may lower the ranking of all the websites that it links to. Unless Google suspects that there is a spamming operation going on, other sites will be otherwise just fine.
I am sure there would be no penalty if it was just a few bad sites on the IP... but what if the shared hosting has 700 to 1000+ (very common with cheap hosting) on the same IP, and over 90% of the sites are REALLY bad? I think it would at least throw a flag of suspicion up.
that is what I meant in my previous post - there are some domains (and IPs), especially free hostings providing subdomains that were massively used to create doorways, so Google banned entrie IPs (and even groups of IPs belonging to that free host).