Download photos from two icloud libraries on external drive

one option is to create a new user on your Mac so that each of you has an account to log in. Then, set up each of your iCloud libraries to save to the external disk.

The "Ignore Ownership" box need to be check on an APFS drive.

It has nothing to do with Libraries, except that they don't work without it being checked.

I think it's unclear exactly what you want. Do you want on Library on your Mac with all the pictures from both accounts? If that's it, then you're right--

Start with a new empty Library, connect to his account, and your Mac's Library will fill with his pictures from iCloud. But since your new Library started empty, it won't change his Library. This could take days. Then, disconnect from his account and sign in to your account. All of "his" pictures will be copied to your iCloud Photos, and then all of "your" pictures which were already in iCloud will be copied back to your new Mac Library.

His Library remains the same; yours has all the pictures. But, you're not connected to his account, so when he adds pictures, you don't automatically get them.

Is that it? or something else?

That would combine both libraries into one unless you completely erase and reset the Mac between changing Apple Accounts.