Factual error: After the onside kick, they did NOT return for a big gain. Bateman tried to keep running with the ball, but Falco (who as quarterback shouldn't even be on the field during this play) tackled him. While Bateman was running with the ball, he just kept going back and forth near the line of scrimmage and didn't advance.
Factual error: It appears the movie roster of replacement is made up of 22 players (23 if you count the kicker). This is evidenced by Falco being cut once Martel crosses. This would not happen in the real NFL. NFL rosters carry 53 players, with 45 typically active on gameday. Falco, even on a replacement roster, would not be the only QB on the roster, nor would he be cut if he was because another QB joined the team. Teams usually carry two QBs minimum, if not three.
Factual error: The clock would stop on an incomplete pass, rendering the use of a timeout in that situation to stop the clock pointless. They call timeout after Falco throws incomplete to Franklin, which would not happen in a real NFL game unless the coach or a player needed time to call a play or get their signals straight.
Factual error: The NFL rules for an onside kick state that only the receiving team may advance the ball. If the kicking team recovers the ball, then the play is blown dead and the recovering team goes on offense from that spot. This would mean that when Falco having to call a timeout after he tackled Bateman running around with the ball wasting time would not have actually happened in a real NFL game.
Factual error: The clock would stop once an onside kick is blown dead, meaning there would be no need to waste a time out. The first onside kick attempted by the Sentinels, they recover the ball and are down by contact. This should have blown the play dead and automatically stopped the clock, but McGinty calls a timeout to "stop the clock." This wouldn't happen in a real NFL game, even back when this film was made.
Answer: He is deliberately making them look bad. Purposely throwing interceptions, running plays that will not gain any yardage. He tells O'Neil he can't play with them because he is lying.