I don’t think he was pleased. The knight was moving to take off his glove and Midas told him to be careful, “Remember what happened to Frederick” not as a ‘If you act out like he did I’ll turn you into gold’ but instead as a ‘If you accidentally touch my hand, you’ll turn to gold, and that would suck, bro.’ In the episode “What Happened to Frederick” we’re told that Kathryn and Frederick were engaged, as Frederick was the gem of all the knights, a true warrior (something that Midas prized). The three of them were travelling when they were attacked, and Frederick saved the King from being killed. He leaped to save him, and was brushed by the hand and turned to gold.
It is also made pretty clear that whilst King George is VERY eager about the merger, Midas stands to gain nothing from it aside from a) a slain dragon and b) A husband for Abigail. He is going to giving King George mounds of fortune. If Frederick had not been turned to gold, he would have been able to slay the dragon and he would have had a husband for Abigail.