Yes, a beach is a big lump of sand next to water and you are wearing your swimsuit there because you wish to swim in that water and/or take in the sun by lying on the sand.
The friendly part applies to other users and not the terrain, ie the people there to enjoy the ambience as you do.
Such people will probably be those who like to wear brief suits also and even if not will be tolerant of those who do. For those who may be a little nervous of the "appropriateness" of the beach they are on, others who know a location well will often use the term to indicate that derision from the anti-speedo brigade is unlikely to be encountered.
I hope I have covered everything (deliberate pun) but no doubt you will see some more posts to add to and/or correct the above.