I am by no means an expert in autism nor an expert in child rearing, but I happen to be a parent and I happen to to have a child (S7) who has an Autism Spectrum Disorder (ASD), albeit very mild and high-functioning (Aspergers). I'd say your friend is great denial about her son.
Any child can be taught right-from-wrong, even to the smallest degree, even mentally-challenged ones. Discipline is imperative for all children to learn their boundaries with other people. We all need to learn the consequences for our actions. I don't agree with the notion that autistic people can be automatically given a free pass. It is not fair to the ASD child.
H*ck, we can discipline and teach obedience to dogs, who are far less capable than most ASD children (not that one should use the same methodology, mind you), so developmentally challenged children should be as capable.
The pepper on the tongue bit with your friend shows that even she acknowledges and hopes that some form of negative stimuli (punishment) will train the child against an unwanted behavior. It belies her assertion that her son's autism prevents him from being disciplined.
I know how difficult it is for a parent to cope with a handicapped child, especially a mentally-handicapped one. Your friend may not really know how to handle her situation, through ignorance and/or denial. I hope, if she hasn't already, she has sought out aid from support groups, for parents with Autism Spectrum children. (We have a great one here in NC.) She needs to learn what can and cannot be accomplished with her child.
Keep your own kids away from her loose cannon. Talk to her if you think you can.