To accomodate for the fact that not everyone "knows" all the users on their friends lists, in order to modify who is displayed under your Foaf:knows categories, you simply need to create a specific friends group. You can create and modify your friends groups at http://www.livejournal.com/friends/editgroups.bml .
To use a FOAF friends group, create a new group labeled FOAF-knows. This group will act as a filter for users who are listed under your FOAF:knows listings. Simply add the journals you want listed there to the group, and they will be displayed under your FOAF:knows listings.
Keep in mind that LiveJournal will not display communities or syndicated feeds under the foaf:knows section. So, if you friend a community, even if it's in your FOAF-knows group, it won't be displayed in this section. This is both to conform to spec and to save in possible incorrect relations.
That sums up how to limit who shows up in your FOAF-knows filter, so that you only establish the relationships that you really think belong there.