Do you call your kids' friends by their nicknames?

I do.

I don't remember many of my sons' friends having nicknames other than shortened forms of their given names. There were a couple of cases of 'Johnson' becoming 'Jonno', or similar, but fortunately no 'Hornie'
The one I struggle with is my niece's husband, whose given name is Steven, but is called 'Scoob' by nearly everyone. In person, I am OK, but I can't bring myself to write Scoob on a birthday or Christmas card, but Steven just isn't him.

My dh has given our kids’ friends his own nicknames over the years.

Your story reminds me of Boner on Growing Pains.

I don't recall our kids' friends having nicknames, but it is an issue at school, sometimes. There are kids who have had nicknames since birth and that's who they have been all their lives. I'm thinking of a kid who went by Boomer. It might was well have been his real name (in fact, I wouldn't be surprised if he changed it). I called him by his nickname. Other kids want to invent a name for themselves and do a "Call me Studly" kind of thing and I decline that invitation.

I remember when my son played on the Jr high baseball team and he hit in 3 runs with a in field hit down first base line. Someone on the bench yelled "Go Dirty D". It stuck for that school year and I couldn't imagine his friend's mom's calling him that. Their dads though, sure.

In middle school, my son’s friends started calling him Tgor, which was a shortened version of his first and last name. I always thought it sounded like a dinosaur’s scientific name, but my son seemed to like his nickname and it stuck.

Other parents would come up to us after a baseball game and say something like “Tgor got a nice hit tonight!” And then they’d look embarrassed and say “I mean Thomas got a great hit. I mean, uh, do you mind if I call him Tgor because that’s what my son calls him.”
I’d always smile and say it was fine.

Even at parent-teacher conferences in high school, the male teachers would begin our conference referring to my son as “Thomas” but by the end of the conference they were calling him ”Tgor.”

None of DS's friends really use nicknames (that I'm aware of) except one of his oldest friends goes by his last name, so I call him that.

Do we attend the same church? 😂

...  and is it on the east side?

My oldest son's group of friends all have nicknames. Some of them I know (including his), some of them I don't. One friend, though, was introduced as Donny. I've always called him that. It took several years for my son to tell me that this guy's name was Alex. Donny was a play on his last name. He will always be Donny to me.

Isobel
or
Isabelle

Add in Isabella, and you have named about 30% of my preschool girl students.

Depends on the nickname and only if the parent also uses it.

I called my kid's friends by their nicknames. Still do. But, none of the nicknames were/are inappropriately suggestive like Horny.  I think in that case I would refer to the kids by his proper given name. 
The ones I dealt with were more like Trey (John David Smith III) or Cy (Cyrus) or Nace (named for St Ignatius) 

I know two more but they spell their names Isobelle so I assumed that DD's friend was just different to the norm, maybe not, and it's the other two