I think it'll be a good idea to start the "You can't, however, hide your Friends List...." in the fourth paragraph out on a new paragraph. It isn't easy to spot even though I knew this information was in the FAQ. And if it wasn't easy to spot for me, then it must not be easy to spot for other users. And since the paragraph started out talking about the banning option, it would make more sense for this section to be in a new paragraph anyhow.
Oh, and maybe even change the FAQ to say "Can I remove people from my "Friends" or "Friends Of" list? Then change the FAQ accordingly.