That's not quite right, there are both rear facing and forward facing seats which harness past 18kg. (This seat doesn't have a 5 point harness at all).
In terms of whether this seat is suitable for your LO, technically it's legally approved for them to use - and your acquaintance has probably opted for this specific model because of the extra strap between the legs and the pad for the shoulder belt, all of which make it feel a bit more secure, but you're right that at age 3, it is more protective to have them in a 5-point harness. It's not really clear when exactly that changes - there is some evidence that size plays a part so 105cm/18kg is better to change than 100cm/15kg (which is the minimum). A lot of people give age 4 as the age to swap but I am not sure what this is based on exactly. In general it makes sense to go by your LO's temperament and your gut feeling - do you think he'd sit properly in a seatbelt? It sounds like you would prefer him to be in a 5-point harness, and I do think that's likely a good idea at 3.
Since your LO is over 105cm, you have to rule out most i-size/R129 seats I'm afraid, including the Graco Energi. The harness limit on that is 105cm or 22kg, whichever comes first. Since he's past the 105cm, he's too tall for it.
Joie Bold is a good option. You can use the harness up to 25kg and it extends right up to the max of the seat so is unlikely to be outgrown by height.
You could also look at ERF seats up to 125cm which generally have a 25kg or higher limit too. You would then need to buy a high back booster seat later on, but these aren't as expensive as the ones with harness so it's not such a big outlay. It's likely that a standalone HBB seat will have a bit of a better belt fit than the Joie Bold used in HBB mode.
If your son continues on the same growth line, he'll probably reach 125cm at around 5.5 years, so you are looking at about 2 years' use from an ERF seat. Britax Safe-Way M or Axkid Move are the cheapest ones here - both under £200 (appreciate that is still a lot for 2 years' use though if you don't have a sibling to hand it down to)
The only other option is to look at R129 certified 123 type seats (which convert from 5 point harness to HBB) but use the harness past the height limit. This is technically not a legally approved use of the seat, but I've seen various things suggesting that it's not a safety critical issue to exceed a standing height limit, provided the child is under the weight limit specified and has a good physical fit in the seat (ie, their shoulders still fit under the headrest, and the 5-point harness is at or above the level of their shoulders.)
If you do this I wouldn't personally go for the Graco, I would be happy to do it with a Britax seat though and I did - my DS2 used the harness in the Britax Advansafix i-size, which has a limit of 102cm, up to 109cm in height. Britax have Evolvafix and Advansafix Pro out now which are certified up to 21 or 22kg and 105cm, then turn into HBBs. However you'd want to try the seat out in a shop first I think to check he'd even fit into the harness.
Overall in your situation I'd go for Joie Bold.