As for whether or not Mysterio is a villain in Spider-Man: Far From Home, that is still a mystery.
So far, all of the promotional material for the movie has set him out to be an ally of Peter Parker and S.H.I.E.L.D. This has now been addressed by Far From Home director Jon Watts, along with some of the wardrobe decisions for the mysterious character that helped to shape him without having to wear the fishbowl all of the time.
In the comics, Mysterio ends up framing Spider-Man for robbing a bank, so we just might see a tease into his true nature when Spider-Man: Far From Home hits theaters this summer.
Jake Gyllenhaal is playing Mysterio in Spider-Man: Far from Home.