Role of friction during Collisions

With friction operating in the system between the two bodies while impact(elastic),mechanical energy conservation law still holds good because in elastic impact friction doesn't do work as it is instantaneous(somewhat impulsive).

Linear momentum may be conserved if there is no external force on two bodies but as friction(between colliding bodies) will be an internal force in the system so it will not change the total momentum of the system.

Normally the friction will not do any work during a quick collision of two hard bodies, like billiard balls. Nevertheless, it will have observable consequences in the form of rotation: part of the initial kinetic energy will be converted into rotational kinetic energy. I think if you assume perfect conservation of energy you might even be able to calculate exactly the collision of two finite-sized billiard balls in theory but it is not an easy problem.