You can make a different decision and still play together. Faction-specific quests your friend can do will be locked from you, and vice-versa. May be a situation where your friend cannot progress on his quest if you are hosting because of the world-state, such as if a certain NPC is dead or an event has played out one way instead of another.
You will have to be careful though, your friend’s allies would be your mortal enemies. Try it in PvP. 
They will reset. You will be able to make different choices.