He's wearing a Native American headdress and using a fire attack. This isn't supposed to be racist, it's just referencing the Game N Watch game Fire Attack, where Mr. Game N Watch played the roles of cowboys defending their fort against Native American fire attackers.
I'm part Italian, yet I love the Mario Bros. What's next, SJWs, you gonna call me a shill for Nintendo?
Some people will just bitch and moan about any damn thing. -_-