The bug is in cgi-bin/LJ/Console/Commands/Friend.pm here is a diff that I created that seems to fix it.
--- Friend.pm.bak 2009-05-19 15:29:42.000000000 -0400 +++ Friend.pm 2009-05-19 15:47:19.000000000 -0400 @@ -92,7 +92,9 @@ } else { $self->error("You don't have a group called '$group'."); } - } + } else { + $gmask = LJ::get_groupmask($remote, $fu); + } my $opts = {}; $opts->{'groupmask'} = $gmask if $gmask;