For the longest time, “liberal” seemed like it basically just meant “Democrat” the same way “conservative” has/had been used to mean “Republican.” Now, it seems like it means “bad Democrat” and is even worse than being MAGA the way many seem to use it. Where did its use as an insult within the [relative] political left come from, and what does it specifically accuse/identify someone of/as?
Look ultimately words mean what they mean in the context that they’re spoken but broadly neoliberalism is highly socially permissive. Provided, that is, one does this as a responsible member of the capitalist economy and doesn’t disrupt the market.
Like you can have neoliberals that love trans kids, celebrate pride, want more black female drone pilots etc. It is, however, not a neoliberal position say compare the number of vacant properties to the number of homeless people and suggest that perhaps we should just take the unused houses and give them to homeless people? That would violate the principles of private property and free markets. After all: what freedom does one have if you can’t watch someone freeze to death on the doorstep of your vacant investment?
If your friends think that freedom to do that is utterly absurd and a society which defends that is fundamentally rotten then they are not liberals in the academic sense, however their substantially more leftist stance may be called liberalism in the political context you find yourselves in.