I would tend to say as a general rule that it is never necessary at all. It is always possible to cover up. And my parents and siblings were never undressed around eachother at home. However when mom was unable (or more likely just got tired of doing it) to take us to the water park or pool, my teenage brother took us, and my other brother and my sister and me went with him into the male locker rooms, so we saw him, dads, and many of his buddies in and out of their trunks and showering. We did this till I was maybe 9 1/2 because I helped with my baby sis and bro.
Public nudity is a different from en famille nudity. I’m of Scandinavian background – the whole family went in the sauna together until my brother got old enough to be modest – he was probably between 10 and 12. Thereafter, I went with Mom, and my brother with my Dad. When friends and relatives came for sauna, the groups were sex-segregated, but all ages were together.
People who are comfortable in their own skin at home are less likely to act out inappropriately. The only kid in school who undressed herself was a girl who was regularly beaten at home, and all the other kids knew there was something wrong with her.