My Brother wanted to join my game (were both on the same network) The tab would even show (as usual) that a friend is playing at the top. But when he switched to the tab. The tab would say that none of his friends are playing minecraft even though it says the oposite at the top. Before the update he could easily join me without having Xbox live gold because were on the same network.

Yes we have befriendet each other on Xbox Live and Yes the game is visible to lan players.

Hope thats enough info.