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I was quite concerned, which is why I sought help from a specialist at the school; I also considered the possibility that the child might be going through something serious at home and not know how to ask for help. My intention is for the educational psychologist to look into the situation and, if necessary, initiate a safeguarding protocol because, ultimately, we are talking about a nine year old girl who also needs protection.
Likewise, I am gradually reducing the contact my daughter has with her. Currently, they only see each other once a week, under my supervision, and I have encouraged my daughter to focus more on other friendships and to get to know new people. I made it clear to her that the advice her friend gave her is wrong, because a friend would never ask you to harm yourself.
One must exercise a great deal of tact in this situation, and strengthen the trust our children may have in us that is the most difficult part.
This friend sounds awful and I would do my best to distance. It's tough when you live nearby, but I would look for any opportunity/excuse not to spend time together.
For instance, if you notice there is a certain time that the friend seems most frequently come over, make that a new time for doing shopping or running errands. Or if activities (sports?) are available at school try to get your daughter interested in those if they take up time this girl could otherwise be spending time with your daughter.
Honestly, I would even go do far as to force an end to the friendship. I'd try to get my child onboard, but that's certainly tricky.
But a real red flag for me is when another kid says not to tell parents something. (The stuff about bruising and falsely accusing someone is WAY past red flag territory).