Fuwa definitely knew he was the trialing prince, there's literally a panel where she notices his name. There are a couple lines about her saying she knows the MC is a good guy but she dislikes him because he is the trialing prince. There's also that chapter where it shows how she reacts with...
It would only be toxic if he didn't want to change, and if she was trying to change everything about him. At most this looks like it'll be a change to his fashion sense so he seems more presentable.