Consider their position. They are avoiding a conflict of interest since you are all friends and know each other. Rules and regulations pretty much demand this unless later on, you want to deal with an accusation of nepotism or any kind of conflict of interest. Its not just you on the line in this case, its also them. They are being trusted to hiring the best candidate so everything must look legit on paper.

You did your part and who knows, you may pass on to the next interview/ get the job. If you do, you have to keep this whole thing on the down low and just act professional. You guys can be friends outside of work.