Would an arc involving a character coming to terms with a friend’s death feel cheapened to readers if it is later revealed that the friend’s death was faked?
Not, unless your character knew their friend’s death was faked from the start, but you neglected to share that information with the audience. This is a little more complicated, depending on who the characters are, so let’s pull out some potential permutations.
Probably worth saying, but faking your own death isn’t something you come back from. You’ve just lied to everyone about something very serious, and that’s not the kind of thing most people are willing to simply laugh off. For someone who intentionally fakes their own death, there is no coming back from that.
Someone who’s been missing for years and was presumed dead will face some of this, but at least in that case, they may be able to present a legitimate narrative for why they disappeared. There’s some gradation here. Someone who intentionally vanished, and set up shop in another state is not going to be received the same way as someone who was presumed dead in a plane crash on the far side of the world, and was cut off from outside civilization.
If your character is dealing with the death of a close personal friend. As far as they know, everything’s above board, and they’re coming to terms with that. Then, no, having that friend pop up later would be a serious betrayal for your character, but, the audience is right there with them. Everyone was betrayed by that former friend, and there’s certainly a lot of ways you can proceed from there. (Again, there are some potential permutations, for example, if the friend was abducted, and their captors faked their death, or other singular circumstances like that. This is something I’d be cautious about recommending, because it could become melodramatic, but the option exists. Or, if said character didn’t fake their death, and has been resurrected somehow.)
You can flip this, if your point of view character is the one who faked their death and hid it from their friends and family. Again, nothing wrong with this from a writing standpoint, but expect their former acquaintances to be less than enthusiastic when they learn the truth.
If your character knows the truth, that their friend is alive, and they’re going through the motions, pretending to grieve, while the audience is kept in the dark, that’s cheap.
Cheap writing is when you decide to screw with your audience. Screwing with your characters is fair game. Whenever you decide to hide critical information from your audience, particularly information your point of view character have, you’re being cheap.
The idea of pulling one over on your audience can be very appealing, and there are ways you can deliver a good plot twist, but the cheap way to approach this is to simply deny the audience the information they need to know what’s happening.
There’s a wonderful phrase you can apply to this: being “economical with the truth.” You are lying, but you’re doing it by carefully giving enough truthful information to mislead.
Writing can become cheap when you withhold too much information. There’s nothing wrong with putting enough out there so that some members of your audience can guess where you’re going. No twist “amazing” enough to stand on bad writing.
There’s also nothing wrong with putting out truthful information that is designed to mislead. An excellent primer on this would be the entire library of Agatha Christie’s work. She built her career on logic puzzles where the available information is designed to make you jump to the wrong conclusions.
If you have to choose between withholding information from your audience, and withholding it from your characters, you should err on the side of screwing over your characters long before you consider keeping your readers in the dark.
Lying to your audience is a very tricky thing. In most stories, I wouldn’t recommend it at all. The exceptions are genres where the entire structure is intended to mislead the reader. Mysteries and some varieties of thrillers are the normal examples here. Even then, you need to work very carefully to avoid betraying the audience’s trust, even while you’re engaging in slight of hand with them.
Lying to your character, and bringing the audience along is different. The audience will be predisposed to empathize with the protagonist in most cases, and if both have been deceived, then expect hostility directed at the former friend. At that point, it’s only cheap if your protagonist drops the ball, and doesn’t behave in a plausible way.