That video is hilarious. At the 2:40 mark he really does do a pro wrestling leg drop on his partners arm.
This reminds me of my uncles who are 5th and 6th dan black belts who run Tae Kwon Do classes.
They love to tell how I'm wasting my time with Jiu Jitsu but never want to free spa with me.
Funny that, I presume the same thing will happen here.
My advice though is the same as Sean's, don't go stirring shit up.
You're responsible not just for yourself but for your students, you might have no issues getting in a scrap but what if the douche or some of his students corners one of your new guys in the street.
I'm a white belt instructor too and I have my fair share of detractors too, but honestly I couldn't care less what they're doing or saying, but if they come in my gym to start something then I'll care and I'll have no problems sorting it out either.
They never do seem to drop in though