• Sharing is mandatory: the first kid has to share with the second.
• Sharing is optional: the second kid has to wait until the first kid is done.

Most of the time when a kid wants a toy another kid is playing with, it's not because there's only one good toy. Instead, it's kids wanting stuff other people have, and sometimes explicitly wanting the other kid not to have it. Being interested in something and wanting to keep exploring it is a positive impulse I don't want to discourage. I'm in the "sharing is optional, wait until they're done" camp:

• Parent: "Sam, it looks like Pat wants to play with the bear."
• Sam: "I'm still playing with it."
• Parent: "Can you tell that to Pat?"
• Sam: "Pat I'm still playing with it."
• [Pat goes and finds another toy.]

And then, over time, we get to:

• Pat: "Sam, can I play with your bear?"
• Sam: "I'm still playing with it."
• [Pat goes and finds another toy.]

And, from the other side:

• Pat: "Parent-nickname, I want that bear."
• Parent: "Sam is playing with it right now. You'll have to ask them, and they might say no."
• Pat: "They might say no." [walks over]
• Pat: "Sam, can I play with the bear?"
• Sam: "I'm still playing with it.

I do think it's good for kids to consider other people's enjoyment as mattering, so if their response to "can I play with it" is "yes" I do say something like "that was really nice of you". And occasionally I'll say something like "Pat would be really happy if you let them play with your bear," to encourage more of this.

In general, this works well, and I see it as teaching the normal protocol we have among adults. Where it causes problems is when I'm with my kids around other kids whose parents use the other approach. Specifically, when my kid has something another kid wants, I'm not sure how to handle it. If they subscribe to the "sharing is optional" philosophy there's no problem, but if they go with "sharing is mandatory" then we're being rude.

Reading articles online (and there are hundreds), nearly every article agrees that a norm where if someone asks for your toy you have to share doesn't make sense. So I wonder if parental politeness explains why there seem to be so many parents who take a "sharing is mandatory" approach? Being polite to other parents when you don't know how they think things should work means assuming they expect your kid to share. You make your kid share so you (and they) don't look like a jerk to the other family. Maybe insisting on "sharing is optional" helps fix this equilibrium, where there's a way everyone seems to agree it should work, and then misguided politeness pushing us to do it another way?