I have multiple interpretations for this. The first one is that the bard literally does see the dragon as different than anyone else.

The second one which I feel seems more accurate is that the Bard doesn't see the dragon as having any different physical appearance than the others but the second image is representative of them recognizing the derg as an individual with thoughts, feelings, and emotions, while the other members of the party either aren't able to, or (little bit cynical take here) they do and just don't care about his feelings and emotions, if that's the case you can't really blame him for being ready to fight.