I'm not a lawyer and this is not legal advice.

It seems to me that your friend is receiving the EUR600 for which they are asking. Singapore is asking them to sign a declaration stating that the claim is considered settled and there will be no future claims resulting from that specific incident. It doesn't mean your friend can't pursue a future claim against Singapore should future damages be incurred.

I do not see any risk inherent in signing the document, at the end of the day your friend is getting the 600EUR