Honey can be prone to guarding things... (especially from the children) she's a *lot* better than she was, but still has her moments (especially when the children have been making a lot of noise, which means she is more stressed).
We have to be careful to ensure there aren't any little hidey holes in the hallway, as she will adopt these and guard them (not practical with young children running about). We absolutely have to ensure my coat (with her ball in the pocket) is hung up properly, or she will guard this. And she isn't given high-value long-lasting treats when the children are about.
If she manages to get something she is going to guard, it is very obvious, as her whole body language changes. We generally try to distract her on to something else and then remove the object... Or we ask her for a retrieve (this is something we have trained fairly reliably in the past) and then reward. With 2 small children, we don't live in a tidy house, and Honey will often pick up one of the children's toys - they know to ask us to get it from her, and we generally do a swap with no reluctance. If she is very stressy with a toy, we'll leave it a few minutes, then call her for something else rather than create confrontation.
I don't really think it's fair to say that you just "don't allow" guarding - it's a complex behaviour and some dogs are just more prone to it than others. I'm very confident that our friend doing the taking things away and giving them back and taking them away again trick is one of the things that contributed to Honey's tendency to guard, and it's certainly not something I would suggest anyone with a dog who is already showing signs of guarding do... that approach with anything Honey is attempting to guard would intensify her behaviour 10-fold....
As stress is a big factor for Honey, if I see she is looking for things to guard, I'll often do some quick "find-it" work with her, as sniffing is a stress reliever for dogs, so it brings her agitation levels down as well as refocussing her on a positive activity.