Sasuke would likely be very suspicious. He has always had a complex relationship with Naruto, and this new, twisted Naruto would be a huge red flag for him. He might initially think it's a trick or some new form of power Naruto is trying to master, but as he realizes it's a real change, he would be on guard. Sakura would be worried and try to find a way to bring Naruto back to his old self. She has always cared about Naruto and would not be able to stand seeing him like this.
Sasuke would be extremely suspicious. He has always seen Naruto as his rival and a symbol of the village's hope. If Naruto starts acting like Pein, Sasuke would think it's some kind of trick at first. He might even be ready to fight Naruto to figure out what's really going on.
The villagers in the Hidden Sound Village would likely be in awe at first. Some might be skeptical, but as Naruto starts to show his leadership and use his godlike powers for the good of the village, they would come to respect him. In Konoha, his old friends would be proud of him, but also a bit sad that he's leading another village. Villains in the Naruto universe would probably be more cautious, knowing that Naruto's power as Otokage could be a major threat to their plans.
Sasuke would be deeply affected. He would probably feel guilty for not being there to save Naruto. At the same time, he would vow to uphold Naruto's ideals and make the ninja world a better place, as a way to honor his friend's sacrifice.
His relationship with Sasuke would be interesting. Sasuke might be a bit confused or even annoyed at first. He's used to Naruto being his own energetic self, and now Naruto is acting like Kakashi. Sasuke might see it as Naruto trying to be something he's not. But over time, he could come to respect Naruto's new - found admiration for Kakashi and see it as Naruto growing as a ninja.
His friends would be horrified. Sasuke, for instance, who has known Naruto for a long time, would be shocked at this transformation. He might initially try to reason with Naruto, thinking that there's still some good left in him. But as Naruto's psychopathic behavior continues, Sasuke would be forced to consider him an enemy and take action to stop him if necessary.
In terms of his romantic relationships, if there was a budding relationship with Hinata, for instance, his new status as a jounin could either strengthen their bond as she admires his achievement, or it could create some distance as he has more duties and less time for personal matters.
Sakura would be heartbroken. She's always had feelings for Naruto, and seeing him insane would be a huge shock. She'd likely try to use her medical skills to find a cure for whatever is ailing Naruto's mind. She might also try to get help from Tsunade, hoping that the former Hokage's knowledge could save Naruto.
Shikamaru, being the intelligent one, would try to analyze the situation first. He would understand that Naruto isn't himself and would start to plan a way to reverse whatever happened. He might try to gather the other ninja to form a strategy. Kakashi would be deeply disappointed. He has trained Naruto and seen his growth, and this change would be like all his efforts going to waste. He would try to talk to Naruto, using their past experiences to try and break through to the real Naruto inside.
He'd become more cynical. Naruto is known for his positive outlook, but as a gangster, he'd see the world in a darker light. His trust in others would be severely diminished.
With his friends in Konoha, like Sakura and Kakashi, there would be a major shift. Sakura might initially be conflicted between her loyalty to the village and her friendship with Naruto. Kakashi, being a more experienced shinobi, might understand Naruto's reasons better but still be bound by his duties to the village. Overall, Naruto's departure as a nukenin would create a lot of emotional turmoil among his relationships.