Buddypress restricting content based on friendship status

This feels like such a basic option that I wouldn't be surprised if I've just totally overlooked the big flashing switch in the dashboard. So, here's what I want to happen....

I run a buddypress powered site. We have members. These members can befriend each other. What doesn't seem to be possible is to restrict a member's activity based on whether or not they are friends with someone.

A for example: we're not intending to restrict access to the site (spidering/SEO/allowing people to see the community before they choose to join, etc) but I want our members to not feel like they're being spied on (unless they dig that). So how can I pull all of their content out of the activity streams if the person viewing them is not a friend of theirs?

I've installed BuddyPress Profile Privacy, but darn it it doesn't work. Regardless of whether the privacy options are all set to Friends only, I can still see the activity as a non-logged in user. That plugin does mention some changes to home.php which I can't fathom, so maybe it's that?

This is the last big hurdle for me before we roll the site out so I'm really keen to get answers. Please help me WPMUDEV community.

I'm on the latest versions of BP/WP and Custom Community Pro.

Many thanks,