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I noticed that their was a reference to a range variable in the guard.txt for FRIENDLY_POSITION but noticed it was not used anywhere in the file and not mentioned anywhere else.

Is this range variable working in the guard.txt file based on the first Friendly position?

#RANGE= 50

That's an error in the description text, #RANGE is not considered for GUARD events as the AI will consider any applicable units. It does start with the nearest ones, but will look for anything that might fill the position via Operate moves etc., but again only if applicable.