ומה שכתוב בגמרא שמי שרואה בחבירו שחטא, מצוה לשנאותו, וגם לומר לרבו שישנאהו
As for the Talmudic statement 1 that if one sees his friend sinning, he should hate him, and should also relate the fact to his teacher so that he too will hate him, — how does this conform with what was said above?
היינו בחבירו בתורה ומצות
This applies only to one's companion — one's equal— in the study of Torah and the observance of the mitzvot.
The sinner in question is a Torah-observant scholar, but has lapsed in this one instance. In this case his sin is much more severe than usual, since it is written that even the inadvertent misdeeds of a scholar are as grave as deliberate sins. 2 But even this general assumption of the gravity of his conduct is not sufficient cause to hate him, as the Alter Rebbe continues. Yet another condition must first be satisfied:
וכבר קיים בו מצות הוכח תוכיח את עמיתך, עם שאתך בתורה ובמצות, ואף על פי כן לא שב מחטאו, כמו שכתוב בספר חרדים
He has also fulfilled with him — with the sinner — the injunction, 3 "You shall repeatedly rebuke your friend." The word used here for "your friend" (עמיתך) also indicates, as the Talmud points out4 עם שאתך - "him who is on a par with you in the Torah and the mitzvot," as it is written in Sefer Charedim.
At this point there is no need to exaggerate the gravity of his sin: it is clearly a deliberate transgression.