Does a ranged attack against an adjacent enemy still have disadvantage even if you have the Crossbow Expert feat?

Question

Part of the Crossbow Expert feat (PHB, p. 165) says:

Being within 5 feet of a hostile creature doesn't impose disadvantage on your ranged attack rolls.

This is relevant because of the rule on ranged attacks in close combat:

Aiming a ranged attack is more difficult when a foe is next to you. When you make a ranged attack [...] you have disadvantage on the attack roll if you are within 5 feet of a hostile creature who can see you and who isn't incapacitated.

My GM and some players have agreed that the benefit removes your disadvantage on attacks against distant targets (ones more than 5 feet away) while a foe is adjacent to you, but that targeting the adjacent foe still has disadvantage. Is this the correct ruling?

Answer 1

No, Crossbow Expert removes disadvantage from having an enemy within 5 feet regardless of who the target is

The second benefit of Crossbow Expert extends to all targets of ranged attacks.

No separate rule is made for adjacent targets, so nothing else would impose disadvantage.

Where this confusion may come from:

In previous editions of D&D there were rules that give penalties to making ranged attacks against targets in 5 feet rather than while an enemy is within 5 feet. Your group may be incorporating a separate rule (possibly accidentally) that imposes disadvantage due to the target's proximity.

I mention this because in a previous edit in the question you mention that ranged attacks in melee range may provoke opportunity attacks, which is no longer the case in 5e.