It's not taken seriously. Allo knew that Rex as a largely Harmless Villain, but on Reptilon he probably was far more of a nuisance. If he managed to get the idea of fighting on Earth into Rex's head, where he'd have to do so in secret, he became even less of a menace. Allo's basically just wasting Rex's time and keeping him out of any real trouble.
There was some hint that it was Princess Dei that was involved with putting the idea into Rex's head, to get him and his entire looney crew out of her...hair. The Dinosorceror and Dinosorceress subsequently sent Allo and the gang to keep the Tyrannos out of trouble and from doing too much damage, and conveniently, it got the entire bizarre lot of them out of the Sorcerers'...hair.
