Implied Threat ?
Every once in a while people hear "I practice karate" or "I have a black belt" and hear it as an implied threat - as if someone said, "I could totally kick your ass." Now when someone tells you that they could kick your ass it isn't just a statement of fact - it's not the same as me saying, "I can type faster than you can" - it's usually a veiled warning (depending on context, of course). So sometimes people get defensive, thinking that the karateka is asserting dominance or threatening to use violence to resolve any conflicts.
Implied Fighting Ability
Other people hear "I practice karate" and think I mean to say that I could beat up either anyone who doesn't practice, or anyone of lower rank than me. So they sometimes ask if I could beat up a particular person or type of person, to put me in the correct spot in some imagined global pecking order. The answer is always "maybe," because the outcome of a fight depends on so many things. I could lose a fistfight with my seven year old daughter if I get hit by a stray meteor before landing a punch.
There is another aspect to this that we have to consider: age. I'm 40. 50 years from now I'll still be at least a 3rd degree black belt - maybe higher. Chances are that despite my best efforts I won't be much of a fighter at that point, despite my rank. There is always, or almost always, a loss in overal ability due to the accumulated injuries and the effects of aging and training on fast twitch muscle fibers.
Does that mean that person deserves your respect? Probably, at least a little bit. I have respect for anybody who works hard to achieve a goal - I respect people who can play musical instruments. My cousin Ed is a hell of a photographer, I respect him for that tremendously.
Does it mean you need to tread lightly around a black belt or worry about them beating you up? Only if they're also an ass-hole - which is possible, but actually not that likely. Violent people don't often last long in martial arts - bullies and hot tempered people don't do well when they have to regularly spend time in rooms filled with people skilled enough to kick the crap out of them.
Treat your black belt wearing friends the same way you'd treat someone who has any weird but interesting hobby - an amateur painter, long distance runner, or whatever. Try to avoid talking about violence and dominance issues. We don't practice martial arts so others will fear us, we do it because we love it.