I don't think it'll make Sega look bad. The deal Sega had with Platinum Games just wasn't very lucrative for Sega with Bayonetta, Vanquish, and MadWorld either bombing or just not selling well enough for Sega's time and effort. As a matter in fact, if Sega decided to continue on with their relationship with Platinum Games, investors would probably be pissed considering their rather horrid financial state. Nintendo on the other hand has better resources and more motivation to make Bayonetta 2 a success than Sega did, so I don't think that many people would be looking down on Sega for turning down Bayonetta 2, even if it does become a hit.
And honestly, if it weren't for Nintendo and Kojima Productions, Platinum Games probably wouldn't be long for this world.