Yes and no. We live in a global world and generally all countries are seen as "equal" when it comes to international relations. So when a country specifically severs ties with another, it creates friction, normally the rest of the world can provide proxy relations, i.e. Qatar with Iran, or Turkey or Britain/Canada with Cuba or whatever. But if multiple countries stop recognizing another countries sovereignty, that can cause a lot of complications with say citizens of that country traveling and having relations.

So even if Bolivia doesn't deal with Israel directly, if there is an Israeli business conducting commerce within Bolivia, suddenly it becomes a lot more complicated if there is any kind of financial dispute, or some kind of international incident involving a country that Bolivia doesn't have relations with.

Basically the Israeli company is exposed to a lot more risk then they would be otherwise.