Friends hi-fi system not very good, what do you do or say?

Suggest that as a friend that is being hosted as a guest that you keep any references to their audio system positive.  Maybe a dialogue opener like, "Hey, I'm into audio also, let's get together at our place so you can check out our rig." If they ask you what you think of their rig/sound just keep it positive.  Sometimes little  "white lies" are ok to save feelings/friendships.  When you host them at your home you can share your rig and ask their opinions.  At that point your friends and you may start a dialogue about your rig/SQ.  It's a process that you should allow to develop.  Hope this is helpful/

And maybe you're extremely lucky to become friends with a supermodel who invites you back to her place and when you walk in you see the most amazing hi-fi system.  And of course you being a knowledgeable person about all hi-fi components, this is a really interesting Challenge to deal with.

you have already succeeded with a lifetime achievement and basically are assured that your night will only get better, and I mean a lot better.

But you're tempted to start talking about this beautiful girls audio system and maybe she knows absolutely nothing about audio systems.  So what do you do? Maybe she knows a hell of a lot more than you do.  Horrible situation? How incredibly stupid it would be to start talking about acoustical panels or amplifier power or what cables are being used.  Of course if you ignore the system she may have concerns that you're not as sophisticated as she thought and would actually expect you to make some comments.  So much to admire and you're being distracted by a really nice hi-fi system.

I'm sure many have had that happen to them and I'm curious to know what they have done.

I never debut my system for others because I really don't want or need their input. I built it for me, to sound the way I wanted it to sound, and I'm perfectly happy with the result.

Generally, sound is subjective. If you know that, the answer to your question is pretty simple. 

If it sounds great to him then that’s all that matters no? If he specifically asks for your assessment then it’s fair game. If your tight with him then tell him it sounds like shyte….I go at it all the time with my HiFi buddy who has unlimited funds and just can’t get it right. 😂🤷‍♂️