This is a terrible sign except for the times it’s extremely helpful because the people being cut off were terrible. Queer culture supports/encourages people to cut off hateful, homophobic family. Recovery programs encourage people to cut off their user friends. Whether this is harmful depends on the quality of the people being cut off.
In neither of these cases are people cut off merely for not being a member of the group.
Edited to explain further — It’s not “cutting off family” that is a cult-sign; as you correctly note, there are cases where a group encourages cutting off family for good reason. The cult-sign is “cutting off family because they are outsiders.”
There is an edge case, though: People with terrible families may be more prone to get recruited into unusual groups, and then use their families’ outsider status to justify cutting the terrible family off. From the family members’ perspective, their wayward child joined a cult and the cult made the child hate their family — but from the “cult member’s” perspective, their new friends gave them the courage and social context that enabled them to escape their terrible family!
In neither of these cases are people cut off merely for not being a member of the group.
Edited to explain further — It’s not “cutting off family” that is a cult-sign; as you correctly note, there are cases where a group encourages cutting off family for good reason. The cult-sign is “cutting off family because they are outsiders.”
There is an edge case, though: People with terrible families may be more prone to get recruited into unusual groups, and then use their families’ outsider status to justify cutting the terrible family off. From the family members’ perspective, their wayward child joined a cult and the cult made the child hate their family — but from the “cult member’s” perspective, their new friends gave them the courage and social context that enabled them to escape their terrible family!