The avocado tree develops a shallow, wide spreading root system. Important roots will be in the top six inches of soil running in all directions. The roots are extremely sensitive to disturbance quite apart from any treatment of the wood post. There is a good chance you disturbed about one quarter to one half of important root volume when digging for the post and this is likely what caused most of the damage.
It is possible that the tree can recover. The recommended action is to give a little watering but not a lot and then ensure that it has a good thick mulch all around the tree. The mulch will decay and the avocado roots will grow up into it. The important factor is that the roots must not sit in water; there must be good free drainage underneath the tree.
Avocados require full sun; if your post casts shade of any kind on the tree then the shade will not be a good neighbour - the best action might be to contact your supplier friend and explain the situation and ask about moving the tree to a sunnier place. This would be an extremely risky operation due to major root interference and is best avoided. But the reader's impression is that the shade is more important than the tree, and the tree will have to do its best.