Why aren't Find My Friends location indicators working?
For seeing the icon indicator when someone checks your location, you need to go to Settings > Privacy > Location services > System services (all the way to the bottom). Then go to the bottom again and check “show status bar icon”.

Please note that this will make the indicator show whenever any of the system location services use your location, not necessarily when someone checks your location on Find my friends. You will probably see the icon very often and it might rarely be caused by Find my friends.

The purple and gray arrows can be seen on the same page, by the name “location sharing”. You can also disable it there so people won’t see you, but it’s better to enable or disable it directly on the Friends app.

For temporarily disabling your location on the service, open the Friends app and tap your name. Then enable or disable “share my location”.

If your location indicator on the map is red, you can’t be seen by your friends. If it’s blue, then the friends you are sharing your location with can check your location.

The message your friends get when you disable sharing is the same as they would if you didn’t have an internet connection: “location unavailable”.