I have 2 kids who are now 5 and 9.
Ever since they were 2 years old, I have always been open and honest with them, about people, and converse with them, about people/friends, and openly talk with them about my "logic" about choosing friends or acquaintances etc. So that... they gain the aptitude, in how to "discern" people and situations.
And they have always chosen, nice appropriate friends.
I never tell them they cannot be friends with someone. However, I WILL discuss with them, about behavior and about their parents (since I know most all parents at my kids' school), and how I think about that... per appropriateness or not. ie: some parents are nice, but they are not safe... some parents are not nice and per behaviors that we can see and hear... it is not appropriate, etc. And some kids are really inappropriate and/or are bullies or are just troublemakers etc. I openly talk to my kids, about these things. I never sugar coat it. Therefore, they can also "evaluate" people... and situations, pretty well for their ages. And if they are wondering about a person/friend/situation, they tell me. Or I will ask them "What do you think about that or that person?" or, "Is it a wise thing to do?" or, "How can you say no?"
And once, my son (who is 5), was socializing with a boy in school, who is nice but can also really be a troublemaker... and his parents, are like (sorry for the expression) but they are trailer trash. I didn't tell my son the parents are trailer trash... but I explained to my son that, he is his own person and he knows that boy can be trouble, and even he sees that the Teacher was always having trouble with that boy. So, I told my son "You CHOOSE, your friends, and you KNOW that boy is trouble, so is it wise, for you to be around trouble?" My son, made his decision. He said "no, and he's not real safe either... he tries to make other kids do things we aren't supposed to... and he's sneaky."
Kids, can be taught about how to discern situations and people. And a parent, DOES have to teach a child those things and guide them on it.
My daughter once, was invited to a play date at a classmates home. That girl is known to be a bit pushy and a daredevil. My daughter knows that. The girl's Mom, is also, not very.... good at supervising her kid. Once, I saw her at a fast food place. I told her "Oh great, you got some time alone to yourself?" Then the Mom tells me "Well actually, my daughter is at home napping.... so I came here to get something to eat." Um.... what? She had basically left her child at home, and without telling her daughter, she went to get something to eat at a fast food place which was down the street. The daughter was 7 at the time. That is so, inappropriate. So I told the woman "What if Sally wakes up and you are not there???" And the Mom says "Oh she can call me, I have my cell phone with me... I left a note for her."
Duh. My kids were with me hearing this, and even my own daughter couldn't believe it and told me "Mommy! I can't believe she left Sally at home... napping... and came here!!!"
Naturally, I have not let MY daughter, go there for any play dates. Even my daughter knew that was really, not safe nor proper.
And I told my daughter... you are never going over there, do you see why? Of course, my daughter understood.
The thing is, you need to teach children about how to discern people and situations, and be open and honest with them, about it.
My late Dad did that with me, and I do it with my kids, since they were Toddlers. They need to be "educated" about things like this too.
And, no one has to be a "social worker" for other kids or families, if they don't want to.
You just have to say no.
Friends will ebb and flow and change all the time, as a child grows up. And they "outgrow" friends too. It is okay.
And per your situation and that other boy, you just say that you can't have play dates anymore.