I see the quote as warning against a certain kind of naivety. I'm known as a trustworthy person and it's brought me many advantages - people have happily loaned me large sums of money, for example, and I've been employed in high-trust-requiring positions. But I have cooperated in Prisoner's Dilemma-type situations when I really should have realized the other guy was going to defect. In one case, he'd told me he was a narcissist and a Slytherin, and I still thought he'd keep our agreement. I lost a lot.