http://www.livejournal.com/support/faqbrowse.bml?faqid=102 explains custom friends groups, the specially named "Default View" group, and the public/private setting.
Together, these describe what I have determined by testing: that if you create a group called "Default View" and make that group public, then visitors to your Friends page will also see that subset of your friends; if the group is private (the default), visitors will see all of your friends.
Perhaps that could be made a little more explicit? The bit about private/public groups mentions specifically going to "your group pages", but it also applies to the "naked" http://www.livejournal.com/users/exampleusername/friends .
Perhaps something like "If you mark this group "public", then visitors to your Friends page will also only see those friends" at the end of the third paragraph?