The equation you wrote is incorrect,
the correct is: CaCO3+CaO+CO2
The law of conservation of mass or principle of mass conservation states that for any system closed to all transfers of matter and energy, the mass of the system must remain constant over time, as the system's mass cannot change, so quantity can neither be added nor be removed. Therefore, the quantity of mass is conserved over time.
Your friend is incorrect in saying that this doesn't follow the law of conservation of mass. The molecule of oxygen is split up but the number of total atoms of oxygen is same. So, it follows the law of conservation of mass.