My friend got bullied and Communication ban for being Gay.

As long as they have been reported, the enforcement team will investigate it and take the appropriate action. Investigations can take time, so just because they haven't been suspended yet doesn't mean they won't.

She did block the bully but i find it still not right that the bully walks away freely

Of course, what that person did was not appropriate for xbox, but if you friend really did spam, then i guess that that comm ban was appropriate.

From what i found online, xbox may or may not record a party's conversation if :

-You report the person while (s)he's in the party or just left the party.

-One person in the party has low reputation

So if the person bullied your friend while they were in a party and you all only reported that person after, it would make sense they're not banned since xbox support has no evidence of the bullying

I'm so sorry this unacceptable bullying happened to your friend. I hope that he blocked the bullying players while his case is under review.

No no the bully spam reported my friend after bulling her. My friend did noting and got banned and bullied.

The bully did everything and is still playing and laughing about it because Microsoft isnt banning him.