Well of course Toad misled him with mis information. Spike looks like just another Koopa working for Bowser.

Spike: "It's cuz I'm reptilian, isn't it."

Toad: "...yeahhhh..."

Spike: "RACIST!!!!"

Toad: "Dude, you don't need to listen to David Icke to know a dragon in overalls is bad fucking news."