Why is bad company worse than a disbeliever’s company?

The company or association with one who is sinful or heedless is worse than that of a disbeliever, and so one has to make sure to find the company of the righteous. The kufr, the disbelief, of the disbeliever is obvious, whereas the heedless will corrupt the heart of his associates.

If one decides to follow a heedless person, whose heart is indulged in worldly desires, it will arouse the same in the heart of the person who would follow him. In fact, keeping the company of such heedless men is extremely detrimental, as the Beloved Prophet ﷺ said, "A man's religion is like that of his close friend, so let each of you look at whom he keeps close company with" [Sunan Abi Dawud 4833].

The company of a person who is truthful and follows Allah's Messenger ﷺ in the true spirit is an elixir. In the company of such men, the heart shifts away from evil and inclines towards good.