IMO acting out of loyalty is never good. That is a backwards application of the concept intended to make you to act against your own interests.
Some people like to flip the idea of loyalty around from a description of behavior to a reason for behavior as a method of manipulating other people.
Like, if people see me consistently supporting my friends even when that is difficult they might think I’m ‘loyal’, but that’s backwards. I’m not supporting them because I am loyal, I support them because I like them and want them to succeed (and hopefully they’ll support me too). If someone wants loyalty from me, that’s an immediate red flag that tells me they either don’t understand why I do things, or they don’t care and just want me to do whatever they want.