"Maybe you should take a few things out of your pocket before you go," said Mr. Carr.
Alfred replied, "What things? What are you talking about?"
"You have a compact and a lipstick and two tubes of toothpaste, Alfred."
"What do you mean? Are you calling me a thief?" His face got red, and he knew he looked insulted. His boss nodded his head and Alfred became frightened.
Source: adapted from Discovering Fiction: An Introduction, Chapter 12.
I don't get the meaning of "he knew he looked insulted" clearly. Does it mean that Alfred knew that he looked like a fool and from his appearance everyone could guess he is a thief?