Separation of drinking water from other domestic consumption

There is plenty experience on conventional dual water systems which usually refer to separation of potable (drinking, bathing, dishwashing,…) water from non-potable (toilet, irrigation, ...) consumption. However, separation of drinking water solely from the other domestic consumption (i.e. bathing, dishwashing, laundry, toilet flushing and…) has rarely been reported. This kind of "non-conventional dual water system" might be used when quality of available water does not meet required standard of drinking water but can be accepted for other domestic consumption.

Suppose Nitrate or TDS level in a water network is higher than the drinking standard value. Therefore, the water cannot be used for drinking but might be acceptable for the other indoor consumption like bathing. In this case, using the "non-conventional dual water system" could be recommended. In this regard, the following questions might be raised:

-  What is minimum water quality for domestic consumption except for drinking (including cooking)?  Does any standard exist for this? On the other hand, standard levels (e.g. WHO Guidelines for Drinking-water Quality, 2011) of which drinking water quality parameters can be reduced for bathing and dishwashing consumption?  

- What would be the impacts (e.g. operational, economic, social, and environmental) and associated risks, if this kind of dual water systems would be used?

- Do you know any city or rural area in which the "non-conventional dual water system" has been used? 

If anybody has some information or can address some references about this kind of dual water systems, please kindly mention. I shall be most grateful to receive any comments in this regard.