Godot Beginner Tutorial 18: Better Movement 

You're making things harder on yourself with the velocity by trying to think of it as if it were merely the speed. But the speed is only giving you information on how fast you are moving, not your direction, so it's not the same as velocity. The velocity is a vector that encodes two things: 1. The direction you're moving in; 2. How fast you're moving in that direction. Given an arbitrary nonzero velocity vector, we determine the direction of the velocity by comparing the x- and y-coordinates to one another (you've got that information stored in the vector you call 'dir'). To get the speed from this same velocity, we should instead look at the total length (or magnitude) of the velocity; the larger the lenght of the velocity vector, the faster we go. For your specific application, it would be most appropriate to have a variable called 'speed', and then manipulate the speed variable with acceleration and friction (since these two parameters are only used to increase/decrease the speed, and they don't affect the direction you're travelling in). Then you should just set your velocity as follows: velocity = dir*speed (this works since the length of your vector 'dir' is 1 to begin with).