I think that it's fine as the intention behind it isn't bad or for some messed up reason. It was for some silly harmless fun.
But that vocal minority still have an issue because he isn't a fully anthropomorphic character even tho he acts like a human and does human things.
I just don't get their overreaction to him just being stretchy when objectively worse has been done to and with him.
So no you aren't crazy their just overreacting.

Making feral art is fine as long as the character is capable of some sort of agency. Since Scooby literally talks and acts like an adult, it's especially fine! Says more about your friends than you if they think that's weird in a literal community where people turn into piles of noodles lol

Yeah but it apparently doesn't matter to them. Kinda making me feel like shit cause they're just gunna be upset