In The Merchant of Venice, Antonio is proud to call himself "Christian" and yet his actions towards Shylock reveal his real prejudice. He is insulted that Shylock should use Scripture - the very Scripture that Christians would use - but with possibly different interpretations.
Shylock wants Antonio to understand that "thrift" (line 85) reveals a character strength but Antonio tells Bassanio that he should take care of those who quote Scripture because even "the devil" uses the words of Scripture but for his own purposes.
"An evil soul" such as Shylock, "producing," that is, repeating "holy witness," in other words sharing his faith, is like a villain who turns the other cheek. His "smiling cheek" is a reference to being dishonest and appearing to turn the other cheek or accept criticism readily and then turn out to be "a goodly apple rotten at the heart." In other words, his appearance is deceiving and whilst appearing holy, he is in fact "rotten" and deceitful.
Antonio wants to warn Bassanio "what a goodly outside falsehood hath" meaning that anyone who is insincere and misrepresents themselves appears on the "outside" to be a decent person.