Your right about all that but I think you seem to mis understand the hypothetical, in this case it is not about needs or disposable income available it's more about two different investors with equal financial situation and equal discretion income and disposable income that choses to allocate different percentage and that is due to the risk or proximity of the investment not doing well.

Let me explain as I've understood.

MR A Understands the fact that bitcoin has a probability of not giving him any returns or going to zero and still choses to give 25% to bitcoin without putting himself on any pressure and is totally comfortable with it and it does not bother him, but MR B despite being in the same situation like Mr A doesn't go well with having too much in bitcoin and rather decides that it would be better to have only 10% in bitcoin and have the rest in cash.

You see they both have everything equal on both sides but they don't chose the same allocation to bitcoin because they don't both agree that it would be good to be aggressive in bitcoin based on the fact that it could also not give any returns and that should be seen as risk tolerance.