It sounds like you may just not be knowledgeable about it, so it may help you (and your friendship) to take an open and academic view and educate yourself on the stuff your friend believes.
Absolutely! I know very little about it and expressed interesting in being educated on the topic. I have no problem with witchcraft in itself. I would not be against participating but I told him that it would be, of course, for leisure and entertainment. My issue was him taking this into delusion, which is why I told him it to talk to his therapist about this interest. This is where his biggest issue with my statements came from. He's been through a lot. He's currently transitioning from F to M and it's been putting him through a lot of stress right now too, so I don't want to him to bear more from what circumstance it may bring from the prejudice around this. Sadly enough, I think that's what I did with my initial reaction so I made a big mistake in handling this situation.
Absolutely yes. There are parts of those religions that can be prejudiced and hurtful so I would challenge a friend that would fall into them. Of course, if no harm is being done I would be supportive, which is the new position I've taken from the advice here. I recognize there are also benefits from practicing an organized religion for a person that might need it.