I've watched this a few more times, and I think the plot is deeper than I initially thought. I get the impression that maybe they are friends, and Daniel is concerned for Johnny. Maybe Johnny's decision to resurrect Cobra-Kai sets him on a dark path and strains their friendship. Daniel seems to have at least one student. Maybe there are issues between their students, and they both can't help but get pulled into it. Either way, I don't think think it's as simple as a conflict between old rivals.