By what goal is to be achieved. That's how the article defines the two categories. In a nutshell, good faith communication has the goal of mutual understanding, whether it leads to "agreement" or to the other person doing what you want or not. Bad faith communication has the goal of getting the other person to do what you want, by hook or by crook.
> After reading this article, I almost left it feeling more hopeless, as if it were saying most people communicate with bad intention (bad faith)
I don't think that's true, nor do I think it was the intent of the article. I think most people try to communicate with good faith. But in the world now, with instant mass communication, the small minority of people who do communicate in bad faith can often dominate the communication process. I think one way of looking at the question the article is asking is how that can be fixed.
> I assume even the people acting in "bad faith" are acting out of "good faith"
As above, it's a matter of the goal the person is trying to achieve, not whether or not the person is sincere in their goal. I think most people who communicate in bad faith are perfectly sincere. They may even believe that they are doing something good by getting other people to do things those other people would not choose to do if they were communicated with in good faith.
I do think, though, that the choice of "good faith" and "bad faith" labels does have a reasonable basis: communicating with people to get them to do what you want by hook or by crook, not by convincing them through reasoned argument but just by manipulating them in whatever way works, is not a good thing to do. Even if you think you're doing it to achieve a good goal, human history shows that we humans don't work that way: we can't be trusted to use bad means to achieve good ends.