OK, I just wanted to be sure this was not an overall malfunction.
Facebook changed their permissions in a way that, now, you can only see from Mathematica, the friends who authorized our app. The same happens with Wolfram|Alpha Personal Analytics for Facebook. If you go to that link you'll see there's a notice about that update.
Unfortunately, that's the new Facebook policy and is not something we can change from our end :(
If you can make a friend authorize our app (WolframConnector) and run again
and check if your friend now appears there, that would confirm this.
I wish we could do more from here but, while Facebook keeps this type of policy, there's a lot of limitations if your friends don't authorize our app.
Oh BTW, I see in your In that you did:
friends = ServiceExecute[Facebook, "Friends"]
Remember that when using the ServiceExecute function, the service names has to be a string:
friends = ServiceExecute["Facebook", "Friends"]
That's just a note for future uses.
Please feel free to keep posting if you have more issues with this or other services.