It was/is a real song. Brian played it to people who visited, but I'm not convinced it was ever recorded. Reportedly, it's rather good.
Oh, while we're on the topic of Brian's mid-70s songs, "Spark In The Dark", from roughly the same time, is absolutely nothing to do with "Funky Pretty" - in fact, it winds up sounding awfully like "Chain Reaction Of Love".
What part(s)? "CRoL" has always to me sounded like it's made up of parts from different songs. Nice rocking song.