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.
I can see why he was offended when you phrase it like that, that seems like you're trying to belittle their beliefs. Imagine you were finding something that really spoke to you and helped you through a dark part of your life, and a friend said it was a delusion and would only participate as an amusement.
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.
You absolutely did, but at least you're emotionally mature enough to see it.
Regardless of how you feel about it, id apologize to them and see if you can try to redo that conversation and at least try to pretend about caring about doing it, or at least let them know that you'll do it without any of the intellectual judgement you showed before. Might go a long way to showing your friend that you really care about them, and will go a long way to try to help them overcome the inevitable pushback they get from less open minded individuals.