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Yes, but in real life we don't have ways of broadcasting to this ever-changing landscape. In fact, we tolerate quite a bit of collateral damage: you tell your brother something in confidence and he goes and tells your mother.

Socially, yes, this is insufficient. But this isn't really about social reality, it's a technical solution to boredom, which means people enjoy putting work in to manage their friends. It's the whole reason they're there.

What would be nice is the facility to share something with a friend, combined with software that asks if you would like to share also this with [X] circle?

Also, delay updates a bit so that people have the chance to think things like, "Oh wait, I don't want my mom to see this one..."

If we're talking about a choice between unfriending someone and moving them to Siberia, they're already committed to managing their graph in this case.