I have other friendships that have been tested for similar amounts that have survived. But, it leaves a mark.
I had an ex-employee who worked for me under starvation wages in a startup long ago. He was upset about that and some tax implications, and brought it up with me. I gave him a smallish lump sum and enabled him to put a down payment on a house. I need to ask him about that, it was really brave to ask me to clean something up, and I never did that with the friend from the OP. I wonder if it would have gone differently.
I'm seeing a lot of people in my circle struggling right now. I bet 2024 is going to be a bad year for friendships.