IMO, it's cool if they greet each other when eating/drinking and it doesn't interrupt the meal. they do that *a lot*, too, though.
the hugging thing, as an example, in pubs: a Sim is sitting. then gets up, grabs their drink, hugs/is hugged by a friend, then maybe they sit down on a different barstool. or go stand behind the bar. when another friend arrives, they hug them (the drink "disappears" for a moment) then sit down or move away a little and keep chatting. they might leave the drink on the bar.
you can also definitely see it when NPCs leave a venue and return a few minutes later. they hug each other all over again.
so, to me, this hugging thing refers to... both the disrupting of actions (like when cooking or drinking something, they will often stop and just leave whatever they're holding on the floor), *and* how excessively it happens.
it's also a "filler" action. when they are doing nothing, they will hug *a lot*. maybe the same two Sims will hug twice in a short time. or, if they hug one, they will often hug another one who's next to the first. or they will go outside and run all the way to hug someone who's a block away. it's a hugfest. i play 6 Sims who live together. you can imagine how that goes. 😛