I suggest to spend <$250 on a consultation with an immigration attorney to be sure. In fact, many would provide free 30 minutes consultations, which should be enough here.
I'll answer based on my understanding, as a layman.
I understand that I allowed to make passive income being on an visa and not be actively employed / working for another company.
That is correct. You're allowed to make investments regardless of your immigration status. You can make investments even without being in the US at all.
Does being in an LLC mean that I am employed by the LLC ?
No. You're a member of the LLC ("partner" from tax perspective). As long as you're not actively participating in the business (i.e.: you're the "silent" partner), you should be fine. The partnership/LLC Operating Agreement should explicitly spell out your roles and responsibilities.
Has anyone else done this before ?
Can I legally do this ? I found conflicting answers on the web: avvo says I should avoid it, this source says that it is possible
Avvo is a advertisement/promotional service for lawyers. You will not find answers to legal questions there, but you'll find plenty of lawyers who will answer them for you - to you. On the page you linked to all the responses are basically "pay me for legal advice and I'll tell you".
The second article is written by a doctor. I wouldn't ask a lawyer to perform a surgery on me, so trusting a doctor on legal issues is probably similarly ill-advised. However, I found that article to explain the issue in detail and within reason, to the best of my understanding and I agree with the conclusions.
The devil is in the details and you need to have the paperwork to cover all your assets. An attorney can definitely help you here and is worth the small amount they'd charge for the work.