The most accurate interpretation of the narrator’s tone in the passage is:
The narrator’s comment about Smiley being “fond of his own pet critters” is exaggerated and sarcastic, implying that Smiley’s obsession with winning makes him overbearing and difficult to be around.
This choice highlights the irony in Smiley’s character — while he is described as a “good man” who loves his pets, the way the narrator presents this affection and his competitive nature suggests a deeper critique of Smiley's behavior, indicating that his obsessions overshadow his positive traits. The use of phrases like "you couldn't do nothing without feeling like you was competing with him" underscores the uncomfortable atmosphere he creates, which adds to the ironic tone.