My personal opinion is that it would not be appropriate for any of us, here on PC, to second-guess what your friend's therapist is telling him. From what you wrote, I would be inclined to agree with you that the advice your friend is getting from his therapist is misguided. But that's just my personal opinion based solely on what you've written here. Clearly I don't really know anything about what is going on in your friend's therapy.

Beyond that... since it appears you have expressed your concerns to your friend, & he has asked that you just "watch" & be there for him, my opinion would be that this is what you must do... to the extent that you are able... difficult as that may be for you. Your friend has set some clear personal boundaries & I believe you have to respect them.

I don't know what the history of your friendship with this gentleman is, of course. But if, as time goes by, you find yourself in a situation where your friend keeps doing things that end up hurting him, & then comes back to you seeking solace, you may find yourself in a situation where you have to establish & enforce some personal boundaries of your own. Here are links to some articles, from PsychCentral's archives, both on the subject of establishing your own boundaries & also on respecting the personal boundaries of others:

https://psychcentral.com/lib/what-ar...do-i-get-some/

https://psychcentral.com/lib/the-imp...al-boundaries/

https://psychcentral.com/lib/10-way-...er-boundaries/

https://psychcentral.com/blog/how-to...es-boundaries/

https://psychcentral.com/blog/4-ways...es-boundaries/

My best wishes to you...