The part in bold describes what a 'bad loser' is like:
1. A bad loser is one who wants to win so badly all the time that he/she cannot accept losing.
2. A bad loser is one who ruins perfectly good relationships.
3. A bad loser is one who gives rise to a whole lot of negative emotions like bitterness and anger.
So, the adjective 'bad' is used in the sense that you probably already know.
Student or Learner