What you are feeling is called cognitive dissonance. You have the idea of text so hammered into your mind, that when you realize it's merely a convention that makes it readable in practice without needing to know the encoding, you cannot even concede, despite this being an obvious truth. This phenomenon is called "un*x braindamage".

More or less all possible interpretations of what this person said are correct. But UN*X braindamage also comes with dunning-kruger due to the fact that you've memorized so many factoids after many years and think someone doesn't know what they're talking about when they get them wrong despite their overall idea being correct.