And what does that mean to be evil or to be good, or to be right or to be wrong. I think we overuse these terms here. People are more complicated than this, they do not deserve to be tagged like this. Since book/film characters are supposed to somehow reflect real life people, we shouldn’t expect them to be so one-dimensional.
He didn’t let Belle transform him because he believed that she was working for the Queen, and the Queen was using Belle to strip him of his powers. I think it was made pretty clear in Skin Deep. If she suceeded God knows what she would do with him.
Besides a powerless Rumple wouldn’t have his happy ending with Belle with the Evil Queen waiting at his doorstep. He was probably aware of that.