I visited Madeira last Oct/Nov and as you've identified there is no lounge for BA customers. I have some Priority Passes and hoped to use them; PP state there is a TAP Portugal lounge and the airport website refers to an Atlāntico Lounge (presumably one and the same). However on searching I found the lounge closed and it looked like it had been for some time (perhaps since Covid).

As Shingi and bisonrav have said, the free, public terrace is lovely with great views of the apron (although limited seating), so that's a nice substitute for a lounge (albeit you will have to queue up and pay for your refreshments!)

A further plus point is that FNC actually makes a decent attempt at group boarding properly...