To me both of these people could be right in their statement, depending on their definition of loving kind. It is that simple. If people are too loving kind, they are taken advantage of. Sure. That definition of loving kind, you see it all over the planet, it is everywhere.
The teacher replied, "It is impossible to take advantage of a loving kind person." Okay, now this definition of loving kind is quite different to the first person's definition. The first person's definition describes ordinary people who are very kind and also a bit idealistic in their kindness, sometimes even a bit naive in their kindness. If they are too kind then sure, other people just take and take and take and take. That is a very classic definition.
The quote of the teacher's answer to this question may not be the complete answer, I don't know. However, to answer this question fully, I would refer more directly to the term that we use here, Lovingkindness, as in Compassion/Lovingkindness or the Pali word "Metta", which means Compassion and Lovingkindness. If this Metta is combined with equanimity and wisdom, then we are not being taken advantage of. But this is a pretty high level of equanimity and wisdom, this is not something ordinary people usually have.
So to me, the way the teacher replied refers to a higher level of development. It is a totally different definition of loving kind as to how people normally use the definition. If we have lots of wisdom and lots of equanimity, yes, we won't be taken advantage of because we have the understanding needed to know when to give or not give, when to help or not help. We sometimes show our compassion by not giving someone something that they want. So it depends how much wisdom and equanimity we have as to whether we get taken advantage of or not.