Friendly fire adjustments are currently on the coding table so this is a good time to reply to this thread.
What will be done with the friendly fire is that the NPCs will be able to reason whether there's a chance to hit a friend/companion on the missile flight path, and then refuse to take a shot if the risk is high. The friendly fire problem mostly persists with companions, although all the NPCs can suffer from it at times. The planned additions will bring a lots of new variables to the missile combat, and there will be proper dev. news post about it soon enough.
When it comes to the mentions about hitting your own dog in front of you, eg. when shooting at a bear in the distance. Well, that's something that can happen, but on the contrary to common beliefs here the creature height are being considered in the missile hit calculations. And it goes without saying that terrain elevation is also considered. And the final outcome is naturally a combination of these. So, shortly, you should be able to shoot over your dog, especially if the target creature's height is greater.
Assuming you're on the same elevation there should be zero problems with this - also assuming that target creature isn't prone, which also matters.
So, the dog-hitting cases reported here would need a screenshots as a background information so that we could actually see what factors might interfere there.
If you feel like having made an unjust accidental hit eg. to your dog feel free to follow-up with a report
and screenshot and we'll investigate.
See, even though there is math in place already everything can be always made more precise.
To see if things work as intended I did a little tests with a dog in the shooting line, and a bear as a target.
Here come the screenshots. Things worked as expected and intended for this character.
The bear is 3 paces, 6 meters away in the south. Shot over the dog with no problem.
The bear is 16 paces, 32 meters away in the south. Shot over the dog with no problem.
The bear is 11 paces, 22 meters away in the north, and at slightly lower elevation than the character and his dog. Shot over the dog with no problem.
The bear is 16 paces, 32 meters away in the north, at lower elevation and prone. Only now the shooting angle is the kind that the dog gets hit.
Well, it's true that if you imagine that you've got a dog right in front of you, very close, its body maybe touching your leg, and it's sitting still, not moving at all.
Then, surely you could shoot over it even in the latest scenario. You could lean over and hold the bow over it's head.
But in the game one tile is 2 meters, and we can assume there's possibility of free move. The dog isn't necessarily sitting against your leg.
It can move about and even leap. If it's even a meter away and suddenly raises it's head on the moment you take a slightly blown shot to a target between 70-150 cm in height (withers height of a bear) at 32 meters away and at lower than your elevation... well, it shouldn't be an accidental hit everytime, but occasionally, for sure.
If you take a shot at around 50 cm height, eg. the chest of a prone bear, 32 meters away... the propablity of an accident increases quite a bit.
All in all, feel free to report the related cases you may find odd, and rest assured that the NPC missile AI will be soon adjusted for quite a lot better.