I giveaway ARCs all the time--mainly through Booksprout and my newsletter. But Amazon is finicky on what reviews they post. They've been known not to post reviews from reviewers despite the $50 rule with some of my ARC reviewers--I know because I've had ARC reviewers tell me.
They also use math that doesn't compute to 1+1=2 with their rating system (I had a recent ebook drop from 4.2 to 3.7 with 10 reviews after ONE 3 star review. (Thanks for letting me vent here!)). So... sigh... you work with what you've got. Follow the rules, don't say "exchange", and accept giving away your book whether a review is posted or not.
Finally, be careful with KU. I've heard KU books can be given away for ARCs but I view this as a risky endeavor. When I was in KU, I always sent over ARCs before the ebook was published so that I didn't possibly break the rules. But I know KU authors do ARCs all the time.
Don't let your friend get banned on Amazon over a review. Despite a system ripe for nefarious activity, and likely full of nonsense like all review systems on the web in 2025, we authors have to do what's right.
Don't forget to tell your friend that any review can be posted on Goodreads. Goodreads, though a part of Zon, does not go by the $50 rule to post.