If you are aware that your neighbor living next door is into drug dealing and he come seek your advice how to buy Bitcoin, will you teach him?
No. Despite that you want to get some friends with them, I don't want to be associated with them.
What comes straight to mind is embezzling the ill-gotten money, but is this even safe? My other neighbor knows I am into Bitcoin and he learned from me, I guess that's how this other neighbor knew, I told him to go meet the next neighbor but he said he is not ready to teach.
Anything that seems to be an illegal act isn't safe at all. And that's why if you want to protect yourself and your family, you'll not get close to them. Possible that neighbor told the drug guy that you're into Bitcoin but are you not that scared at all?
What will you do if something like this is happening around you?
If it's already there and he already knew that you're into Bitcoin, choose what you're going to answer wisely. He may ask some favor to you because the idea that a person that has Bitcoin could make them think you've got a lot of money and from there, you might get the fear of what I am saying.
Why would a drug dealer want to learn Bitcoin if not for a safer haven for running the business?
We don't know, anything is of possibility.
My mind isn't settled as I keep thinking different things, what is on your mind readers?
Do not stress your mind that much and think of any possibility that could happen. Your neighborhood is dangerous IMHO and even you've been there for years, you don't know what's on the mind of people.