35+ years ago, my friend insisted it meant the UK definition and, until now, every time I heard the word, I'd think of the time my, otherwise smarty-pants, friend didn't know what the most basic, least offensive, slang meant.
It's pretty mild, but still offensive in the UK. Your friend was right to believe that much. That everyone thinks it means that? No - the US uses it differently for a region of the body slightly less offensive. It's a bit like spunk, which is also fairly offensive in the UK, and fag, which despite having an offensive meaning in the US, is actually traditionally not offensive here, though the US meaning is known and sometimes used - it means "cigarette" here mostly, and "faggot" means something less offensive too (a bunch of sticks or a type of meatball like dish.)