Agreed this is a bad idea, but sometimes ppl think it is their only choice which it may well be in some cases. However even with precautions taken such as routing the exhaust to the outside this does not guarantee there will be no noxious harmful fumes given off from the generator.
There are however some safe guards which will greatly reduce the chances of succumbing to carbon monoxide poisoning. If the generator can be placed in a room with a window which can be closed off from the remainder of the house, the exhaust routed out the window to some distance above its opening preferably located on the down wind side of the home. Then the occupants can be confident in being reasonably safe one key factor is to never seal up the home so tightly that fresh air cannot circulate even if no generator is used the air inside can go foul after several days of being confined, this is especially true for small dwelling with higher occupancies.
Using a gas or charcoal grill inside of a home for cooking or heating or even those catalytic propane heaters should only be used if there is a means of venting the fumes or smoke to the outside and a fresh air intake located some distance away.
My wife and I survived 3 winters while living in an older RV while having to use one of those propane heaters to heat it we placed a fan in front or behind it to force the heat to circulate, the heater was directly under a roof vent which was partially opened and at least 2 windows in the RV were left open just a bit at all times