He got flustered. Shouya was acting all chipper and bubbly throughout the conversation, but when the kid made his declaration decided to play along. If you declare rivalry towards someone you've known a long time and suddenly their whole demeanor shifts, that's gonna rattle you. Especially when Shouya's implicitly making a point of showing off that he knows he's good-looking.
Meanwhile I can't tell if this is going to go the route of a traditional romcom or subvert expectations. Shouya is the frontrunner for Umi's affections, yet as far as he's concerned he's not even in the race. That kind of miscommunication is inevitably going to implode...
Presumably, the first major arc of the series will just keep centering around Umi and her growing and forming connections until she inevitably realizes just what it is she feels for Shouya - followed by a realization that he (likely) doesn't feel the same.
And the second will possibly focus on her trying to win Shouya's affections and getting him to see her as something other than just a kid. Whether she succeeds is another thing entirely, but I do think that the age gap here isn't as insurmountably big as in, say, After the Rain, so there's a very real chance they do end up together (potentially after a time skip if she isn't already 18 by that point). Doubly so because Shouya himself is still portrayed as childlike and developing in several ways.
Though, on that note, I'm guessing the cover pages in previous chapters were mistaken and Umi is currently 16, not 17?