It's clearly allowed, but I think the reaction here is negative because, unlike for example Python, this isn't someone making their own language from scratch which is then organically adopted. Instead, it's essentially someone looking at an established language and community, and saying "you'd all be better off if I was running the show here." And the person making that claim does not have the track record to make that claim believable. I don't think it's strange that people are reacting with some reservations here.

Of course it's not a hostile takeover, he'll try to build something that convinces people that he's on the right track, and I wish him the best of luck with that. There's a small chance that the project succeeds and essentially becomes the successor language to Haskell, and there's a large chance that the project fizzles out, and both of those outcomes are fine. The worst possible outcome is that it succeeds well enough to fragment the ecosystem, but not enough to really take over.

It's because people associate the word with actual government dictatorships and they immediately fall into the freedom and democracy patriotism mode.

The reality is much more complex. If bdfl can work for open source it technically can work for the real thing as well. The keyword here is "can".

Because I've seen what happens when they become not-so-benevolent.

It's better to think of yourself as a shepherd, visionary, leader, etc. Mentally framing yourself as dictator affects your thinking. In short, BDFLs can more easily become assholes.

This person hasn't started anything and is planning on piggybacking on GHC