One of two missable achievements. Should technically be possible to unlock on the first time the killer appears, or at any other loop during the game where all four friends are present. But likely easiest to do early on.
All you need to do is to interact with each of your four friends after they've died, whilst staying alive yourself. As long as you manage to interact with all four after they've been killed during the current loop, the achievement should unlock.
You'll probably have to do a little bit of running for your life and hiding in closets for this one, but it's not too hard. The achievement might also not unlock immediately, but after a minute or two.