Seen it before. I've seen it somewhere else aswell, but I can't think of where. I think it was in a post somewhere, but I don't have any direct proof or anything.
Well, this glitch isn't new. We've seen it before.
Oh and Graham, I didn't add an account that didn't exist as my friend so I don't know what the heck is going on. It only appeared when everyone's friend lists reshuffled a day ago or two.
Normally if a friend of yours is banned, the picture and name will remain in your list, but the link will direct you to a 404.