Its really difficult to analyse a play money hand, because people just play so weird, that most theory goes right out the window. And that is certainly the case here. But with that being said lets take a look at it:
Preflop
First thing to notice is, that everyone have more than 100BB, so its a fairly deep cash game hand. The open is standard, and 3 people call, so the pot is already beginning to get a little bloated.
Flop
SB now leads out for a min-bet of less than 10% of the pot, and BB just call. This looks very weak, and I would definitely raise with top pair, as you did. However your raise is far to small. Yes you made it 4 x SBs bet, but since this was so small, it was still only around 25-30% of the pot, which gave them great
odds to chase, whatever they were chasing. You need to go at least twice as large as this.
Now BB, who originally just flatted the silly min-bet, clicks it back for a min-raise. And this is just complete playmoney sillyness. If he had a strong hand, why would he not raise the original min-bet? Or go larger now? But at the same time why would he do this as a
bluff? Whatever hand he has, his line makes no sense at all. But at the end of the day a decent sized bet now went in, and your hand is not strong enough to play for stacks. So I would just call this and look to play some later streets.
Turn
Now BB makes another very silly bet of less than 10% of the pot, and yes I would also want to raise this. But once again you go far to small. And once again he makes an incredibly silly play and clicks it back. Which I would also just call for the same reason, I would just call his 3-bet on the flop.
River
Now BB moves all-in for an overbet. Its very difficult to say, what on earth he could have and play this way. So I will just resort to fundamentals. You only have one pair, and its not even top pair any more. So 130BB is way to much to put in with your hand, and therefore I agree with your final decision to fold. Most likely he did in fact have something strong like a flopped set, which he choose to play in a very silly way, since its a play money game, and he has no idea, what he is doing.
Conclusion
Please get out of play money games as soon as possible. Make a small $60-100 deposit at any
real money site and start to play 2NL cash games instead. You will learn much faster that way and most likely become a winning player pretty quickly, since even there the average opponent is still very bad. Just not quite as bad, as we see in this hand.