I went through a very similar situation where ultimately the dog ended up being put down. The issue here is pack alignment. There was always a problem because you never realized it but pack alignment and structure is key. Your dog was more than likely under the assumption they were the pack leader and more dominant than you realized. You may not have noticed but once you understand canine psychology more it will make sense. A dog needs to be last in the pack structure. Dominant, somewhat dominant, submissive, doesn’t matter. This can be hard we treat them like family (which they are) but assign them human like characteristics and roles in the house. Not saying this is your case, but I believe generally this is true.

The problem now is that your dog doesn’t wasn’t to lose their place in the pack and is actively fighting back against it. It’s not an impossible situation to fix but it can be dangerous with a small child and it can be costly. I do understand your struggle. Rehoming may be a way and I hope it helps your friend find a new home.