My son accidentally went to remove a friend from group chat, but clicked remove and block,...

your son just needs to send a text based message to his friend, that will then unblock them.

i logged into my account on your first link it shows me and my son in two boxes i click on his profile to remove him it says i'm not the person that added him - the only option it shows on my profile is to remove myself from the family group is that what u mean (as i am logged in on my account) Wont he lose his consent to access stuff if remove myself from the family group?

I figured it out ... Logging into the Microsoft website using my "gmail" credentials, I navigated to the Family Group.

I had to "remove consent" for my son FIRST, and then I was allowed to remove my son from the "gmail" family group. Logging back into my "hotmail" Family Group, I was able to add him back easy peasy.

Exactly. If your son's friend says that his rep was reduced due to a complaint from your son then the only reason he would have known this is if your son told him that he was doing this.

As for the friend being removed from the list he can easily be re-added by typing in the gamertag and either adding him (if possible) or by removing the block by sending him a quick message.

Your son's friend has nothing to worry about with rep on the 360 though. It has no bearing on game play.

Is there any chance that one of you has accidentally muted or blocked the other in some way?

Would you please try to remove then add your friend again to your friend's list?