So we do all agree that using a neighbor's wifi connection is, in fact, stealing.

We're just trying to measure "how much" stealing it is, and whether it should be punished; and if so, how so.

I don't think I've seen anyone here suggest the OP's friend should be guilliotined, or imprisoned, or even arrested. Some think the theft should be ignored, as it's so small, and the harm done to the owner is hard to discern. Others think ignoring it would be a slippery slope, leading to bigger, badder stealing later. A "gateway" theft, as it were.

Lost in all this is the other thing that the young man is stealing: parental prerogative. He's not openly challenging his punishment for some unknown-to-us offense, he's just sneaking around behind his parents' back to obtain by theft, what his parents intend to deny him.