I have a couple of times received items weighing over 700grams in 500g satchels but I have no idea if the seller was sent an underpaid mail notice or not.

If they do catch it, there is a charge for the additional postage and a $1.50 admin fee. Its up to your friend to decide if the risk is worth it or not.

I don't know of any grace amount, but that doesn't mean that there isn't one, just that I can't imagine it would be something that was widely advertised.