I think he's the the kind of character where you're wasting your time trying to put any logic into his methods or pick him apart. Just watch and enjoy IMO, they're well aware that he's an over the top, ridiculous character surely.
There was absolutely no reason for him to talk to/help/whatever Bilbo Baggins to begin with. It goes against what we see his character as but he just does literally whatever the fuck he wants at all times, so there's no sense in overthinking anything he does. Perhaps he thought it would be challenging and less boring to him at that particular time to assume the dentist identity and do a long con rather than torturing Milton Waddles. He's an extremely weird individual, obviously.
Something about Lester interests him for some reason. Enough to waste his breath on him at the hospital and kill that trucker asshole for him, enough to show at his house and kill that cop, enough to drop his cover just because Lester was in his face instead of brushing him aside the way he could have. I have no idea why, but I don't care.