What problems can arise from temporarily shorting power supply of a small microcontroller circuit?
The conversational scenario of "The VCC was shorted to GND for about a second" can be an unreliable report of the full extent of what actually happened. There are many ways this accidental short may have happened and as such there may have been other improper connections going on just before, during or after the communicated event.

Take for example - The friend was using a proto plug board with many open component leads. A simple wrong motion with a hand can result in things being shorted in unexpected ways.