I recognize this is an extreme situation, and one can easily find investments that yield higher returns.

You can;'t quantify that so easily... 

You can easily handle it with a single bank account and some simple bookkeeping practices.

What is asked above could be easily looked at by the SEC as breaking the law.

There are absolutely some additional challenges with the rent by room model and I agree it could easily be more work than an AirBNB.  

Stephen I can’t quantify that very easily with the information I get to but I would say with decreased in enrollment and increases in number of available units.

Would you be able to easily rent the property in question to a non-voucher holder for $4,221 to $4,921?

You would have a much easier time to finance a property that can easily debt service.

You won’t end up in tax court but if you do, you would win based on everything you cited about material participation as long as you have a time and activity log that shows your tasks and provide a guest list that shows the number of nights your guests stay (easily found on the various platforms). 

THe house you describe is one where it could easily happen.