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Answer
False
It's a not a security risk for Bill, though it may be a small risk for Sarah.
Bill has nothing to fear - it doesn't matter if his key is intercepted because it is his public key: no one can use it to impersonate him without having the corresponding private key.
For the same reason, Sarah has no concern about that key either, as long as she trusts Bill not to hand out his private key to someone she wouldn't want to have access. However, Sarah does have a small concern that someone pretending to be Bill could send her their own public key which she would install, thinking it really was Bill's.
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