mate of mine in the village i live in

passed his test on a 125cc scooter about ten years ago so holds a full auto licence

he is riding round now on a 125cc honda cg with L plates (permanent cbt like ginger phil has )

if he takes his test on this will he end up with a full licence ?

Best go direct to source:

https://www.gov.uk/contact-the-dvla

He will get a full geared/auto 125cc Cat A1 licence.
This no longer gets upgraded to a full cat A after 2 years though. He will have to take the test again on a 400cc bike to gain a Cat A2 licence.

What TMax9 saidis correct, plus If he is over 24 (and if he took his auto test 10 years ago I'm assuming he is) his best route would be to take the test on a bike of at least 600cc with at least 53.6hp and that will give him a full unlimited bike licence.

At 24 there is no point friggin' around with the restricted licence route unless you intend to stay on a 125 forever. If you have to use a training school bike to do the test you may as well skip the A2 category and go unlimited.