When we read about witness protection, it is always about being moved to the middle of nowhere. But the reality might be different. And ironically, for some, witness protection might be the only way to get out of this god forsaken Delphi or its equally dilapidated environs. FBI does have better resources. And if with the reward and the WP people will still be afraid, to me it might mean only that some close relatives of the BG might have spoken to the witness.
What if they (the relatives) did not threaten, but explained how ousting BG would harm all of them? I think this is exactly what happened. It is fear of other people suffering that keeps the witness from coming forward.