First, consider the source, a guitarist who was asking bass 1 over to play and bass 2 (an old friend of guitarist) shows up, plays and impresses the guitar player. No matter what bass 1 thought about the situation it was a decision strictly for the guitarist to make and he did when he told bass one "You are good but he's just a bass phenom". Guilty of a glaring lack of social skills? absolutely. Guilty of an appalling lack of tact? no doubt, but he at least tried in his own way to complement bass 1, to let him down easy when it would have been just as easy to blow him off with an insult or put down of his skills. Instead, he told bass 1 he was good, but he liked bass 2 better. Could have been handled better, but could have also been handled much worse. Either way bass 1 was told he had been aced by bass 2. If he chose to hang after that he did so at his own volition and whatever happened is on his plate, not the guy who had already told him he was not the chosen bass player for the project.
The thing so many are missing here is bass 1's opinion of bass 2 are moot and have absolutely on bearing on the situation, it was not his call to make and no matter what he might think of his skill when compared bass 2's skill, and even if his assessment was correct, it was the guitarist who had to make the decision and he made it plain he preferred bass 2, which is where IMO the story ends with bass 1 packing his trash and starting his search for a slot better suited to his skills.