We all have friends and people with whom we enjoy socializing. I think we would all agree that having friends is a good thing. Unfortunately, though, there can be a downside to this normal aspect of human sociability.
Imagine that you work in an office and enjoy running. You make friends with a group of runners in the office and you all gradually get in the habit of meeting a few times a week for a morning run and breakfast. One of the members of the group is a manager. One day, the manager is given a plum new project and asked to recommend a project lead. There are two qualified people. One is a member of the running group and one is not. Even if the runner was more qualified that the non-runner, many employees might still see promoting the runner as in-group favoritism, leading to resentment and a toxic environment. Even worse, not just non-runners but the disabled might feel excluded by their being an "in-group" of runners in the office.
Even worse, many in-groups might be limited by gender or economic circumstances. Women, and many people of color, are not welcome at men's clubs. Single parents might not be able to afford gold weekends or might prefer to spend time with children. The problem is that informal mentoring and networking often goes on within these informal settings, leading to outsiders being passed over for important promotion or opportunities or missing out on useful career advice.