can you fold when all in before the board is run out?

my last session the following hand happened. there were a couple limpers, then a short stack went all in for 3x bb, then buddy reraises, limpers fold, so it is heads up with 8 bb in the pot and buddy folds immediately.

one of the limpers was irate and wanted to talk to the floor to see if that was against the rules. was it?

what if buddy had just called instead of reraising. would folding before the cards were dealt still be prohibited in that case?