BurbMan it should be as level as possible when setting the combo up. I've read various articles and I can't say for certain that being unlevel would cause the sway. This
article does a fairly good job explaining why being level matters. This
video from Demco says it should be level or within 3" in either direction.
My first tow out with our setup I was hyper nervous and getting used how the Jeep felt behind me and watching the camera, but I was the same first time out with our ATV trailer and boat. I did see some minor sway if I hit a pothole with the Jeep but it quickly recovered each time. You might offer to follow behind your friend to see if you see sway as he tows it.