Maybe the crown prince accused the ml of bad things when they were younger so that's why the parents think that the ml is the goblin and they dont want to be wrong so they just ignore the crown prince's brutal nature.
But theres also the chance that they had a priest tell them the children's future which showed the ml in a bad light. Ex: killing the family( due to the mistreatment ).
Yooo is that not Draco Malfoy!? He has a green scarf tooo