Is it appropriate to attend a friends' dissertation defense/FPO (USA)?
Traditionally (i.e. several hundred years of tradition) these things are public. Intentionally so. I urge you to go, or at least ask your friend whether they would object - which they should not. 

In fact other students in the department should probably also attend, just to get a sense of the sorts of things that get asked. 

My own final act as a student was called a Dissertation Defense, not an oral exam, but anyone on the committee could ask any question, even quite off the wall questions. But no one did that. I remember the room as being quite full with lots of professors and even more students. I don't recall whether the rules permitted the public to ask questions, but that is sometimes allowed as well. 

The candidate is expected to say sensible things, but not necessarily to provide an answer to every question posed. But think of it more as a sharing of new ideas with the community than a grilling. If grilling was needed it probably already took place in private oral exams covering some aspect of the field of study. 

There are a few horror stories about people not getting their degree because of their (lack of) performance at such things. Some of them involve questions by out-of-field committee members that are a feature in some places. But the sorts of questions they are likely to ask are necessarily elementary and it is a real failure to not be able to respond sensibly.