I am having the same issue. What's even stranger is that some of my Facebook friends that don't appear in my list of contacts on the People app's main page are accessible if I go to a post that they've liked and click on their profile from there.
It's persistent through to my outlook.com web access as well. I've noticed since the People app update yesterday many of my contacts are no longer showing up in the People portion of both my People app and People section of the outlook.com website.
I think something has changed on the security end of things and due to some of my friends' privacy settings the Microsoft account is probably being blocked to portions of their profiles.
I'm thinking the only fix is to wait for another update... sigh.