Standing next to a friend while they’re cruel to someone isn’t loyalty. It’s a supporting role.

Being present changes what is happening. A person being cruel with an audience is doing something different from a person being cruel alone, because the audience supplies the permission. Silence beside them reads as agreement to everyone watching, including the one on the receiving end. Loyalty to a friend has never meant helping them do the thing they will be ashamed of later.

You do not have to make a speech in the moment. Walking away mid sentence is enough, and it removes the thing they were relying on. Say the rest to them privately afterwards, when there is nobody to perform for.