Can Xbox Friends See Through Your Kinect?

No. Your Xbox friends cannot see video from your Kinect.

Why It's Impossible

Architecture: Kinect (v1 Xbox 360, v2 Xbox One) streams depth/IR/color data to the local console only for skeletal tracking, voice recognition, and sign-in. There is no API, service, or UI to broadcast this feed to Xbox Live friends.
Privacy by Design: Microsoft explicitly never implemented "Kinect sharing" due to privacy, bandwidth, and liability concerns. The "Kinect Share" feature in Kinect Fun Labs let you upload still snapshots you explicitly took—not live video.
Hardware Limitations: Upload bandwidth (especially on 360) couldn't sustain 30 fps video + game traffic. Xbox One reserved USB 3.0 bandwidth for Kinect v2 local processing only.
Software Removal: Xbox One launch allowed "Kinect as webcam" for Skype/Upload Studio (opt-in). This was removed in 2017 dashboard updates. Series X|S do not support Kinect at all (no port, no driver).

Your Gamertag, avatar, profile bio, real name (if shared).
Online status: Online / In-Game / Party / Looking for Group.
Rich Presence: "Playing Halo Infinite — Mission 3", "Watching Netflix".
Game clips/screenshots you explicitly share to activity feed / club / message.
Voice chat (if in party) — audio only, microphone icon.

Settings → Account → Privacy & Online Safety → Xbox Privacy.
Customize: "See my game clips & screenshots," "See my profile," "Communicate with voice/text."
Kinect-specific: Settings → Kinect & Devices → Kinect → "Kinect On" toggle (disables sensor entirely).

Your living room stays private. The only camera feed leaving your console is content you choose to record and share.

Xbox 360