Jacob, after hearing Captain Free Sword's words, knew he was out of the wood about his true background. However, this didn't mean the water was under the bridge, not by a long shot.
Now that it was quite clear that he was not a Faery Human, which aroused Captain Free Sword's interest in the first place. This again brings them back to the fact why Captain Free Sword captured Jacob and what he wanted from him.
Captain Free Sword then asked another question, "How do you acquire your Honorary Badge then?"
"I had killed the Ruler of Dark Beings in the Rare Plains and stopped their invasion," Jacob stated the ambiguous truth again.
Another reason for Captain Free Sword's interest in him was his Honorary status as well, and by his reaction, Jacob could guess that this status was quite a big deal among the living beings.