Idk if this is an actual bug or just... something.
Majority of the time the yellow circles on the map that are supposed to be your friend's positions don't show up. At one point I disabled all the addons except carbonite and they started showing up again, but then another time they weren't showing up anymore and I still had all the other addons disabled, so idk. I can still see guild members positions.
Yes, they do need to have Carbonite and you have to be on each other's friends list. It does not have to be the same exact version, since the data format rarely changes. It did change for 3.2.
Never knew you had to be on each other's friends lists too, but it does make sense, with Carbonite sending data to the guild and people on your friends list.