I noticed that the disfellowshipped one is to be treated as one of the nations, and a tax collector. Notice that a person of the nations is viewed as one that does not have membership privileges to the organization. Tax collectors (of which the apostle Matthew, who wrote one of the Gospels, was one) are generally despised, only because they tended to extort by charging too much and keeping the difference for themselves.
Neither group is totally shunned. Anyone that is a person of the nations would receive recognition, but not necessarily close friendship (after all, Jehovah did not want His nation to associate with Aristotelians that might foul up the whole sacrifice system with the philosophy of letting people function in a free market free of sacrifice to bogus higher causes). Tax collectors could be honest, and such ones would not be despised (in fact, it would have been welcome to have a tax collector that charged the correct amount and not excess). For sure, members of one's family would and should still be able to function in that capacity.
The Watchtower Society and the Filthful and Disgraceful Slavebugger is going beyond the things written. It is transparently obvious that they are doing that to coerce people into staying faithful. This works because they bust families up that do not all comply. Notice that, if the writings in the Bible were followed instead, that family groups and relatives (and business partners, where extortion was not involved) would not be busted up.