Yeah I tend to agree that sometimes the road is more appropriately tagged based on it's hierarchy (eg. highway=service + service=parking_aisle, highway=service + service=alley, etc) rather than living_street just because it's signed as a shared zone.
For shared zone signs you should always add foot=designated + motor_vehicle=designated (possibly bicycle=designated depending on the sign) which reflect the shared and designated access modes. I think the existing designation tag https://wiki.openstreetmap.org/wiki/Key:designation is the most appropriate in this case, so designation=shared_zone. I think there is still a case for some highway=living_streets but agree just because there is the sign doesn't mean it should always be highway=living_street. If there's no disagreement here then we can update the tagging guidelines.
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