"Не по хорошу мил, а по милу хорош"

This is what I've found after googling this proverb It means "нравится не тот, кто в действительности хорош, а хорошим кажется тот, кто нравится".
It makes more sense to me ) I would translate this one as (not literally but logically) "You don't like the person, but he is really good. But you like another person (who is not really good). And you think this person is good (just because you like him, not for his outstanding qualities)". In other words "beauty is in the eyes of the beholder" which means to me "Everybody has got his own conception about what is beautiful (and therefore good) and what is not", doesn't it?

Anyway, "Не по хорошу мил, а по милу хорош" is a strange proverbs for contemporary Russian. This one is too old-fashioned. But its explanation ("нравится не тот, кто в действительности хорош, а хорошим кажется тот, кто нравится") sounds ok. May be it is a better way to use this one?

P.S. "Красота в глазах очевидца" sounds too vague to me. I mean, here can be lots of meanings with context. Though it really means "beauty is in the eyes of the beholder" in some contexts.