(Zilpher is a kind Dwarf. Especially towards Pema, since he sees her as an exceptional culinary warrior, but to others, as well.
Pema revealed that she didn't know what "Insatiable" meant after Zilpher's speech, horribly mispronouncing the word. Most of the Dwarves laughed, and one teared up at how adorable she was. They weren't hostile or disrespected that she didn't understand the honorable title of their fellow Dwarven brethren.
And that's exactly the point, like you yourself stated. She's just a kid. The stablehand knows that she's merely oblivious. Not to mention most, if not all the Dwarves, were in the Mess Hall during the Eating Contest. So, if anything, some of the Dwarves in these stables should've welcomed her back, recognizing the one who was able to conquer Zilpher the Insatiable. Some may be sour by that fact, of course, however, she certainly has the overall respect of the Dwarven community.
He could've chuckled and given a brief response of "We don't have any of that near here." Or no chuckle at all, it doesn't really matter. He knows a child meant no disrespect.
That's it. Simple, clean, done.
Not sure why you put me through all this. It's a pointless argument, but okay.)