What does he mean by "Thou lumpish clay-brained flap dragon"? Why would he say so?

Native speaker’s answer
Rebecca
By "thou lumpish clay-brained flap-dragon", the speaker is insulting Mr Krabs in old English! He references Shakespeare in his insult with "flap-dragon". "Flap-dragon" is an outdated word, and the words "flap" and "dragon" aren't used together anymore. But as old English, it refers to a small piece of meat. By "clay-brained", he is calling him stupid. Of course, these terms aren't commonly used. But he's basically calling him a "stupid small piece of meat in a shell". Ex: You're rather clay-brained, aren't you? => stupid Ex: Don't call me a flap-dragon!