He did not think that Lord Huai had done anything wrong.
The King was just feeling that Lord Huai should greet him first after he went into the capital, but what the King had forgotten was that when Lord Huai said farewell to the King, the King asked him, the servant, to pass on the message to tell him not to inform him of anything in and out of the city. The King even asked him, the servant, to tell Lord Huai to stay lawful about everything, and that he should not greet him in the court, if not for any important matters.
Because of this message, Lord Huai did not visit the court on his trip back home. The King forgot what he had said, whilst getting too satisfied by the Heir, thus thinking that Lord Huai was wrong in every possible aspect.
However, the King would not listen now. He did not want to listen to anyone's words.
He should have stopped him from putting forward the proposal, but he stopped when he heard the King mentioning Lord Huai.