Played through to the goblin camp, not having spoken to Volo in the grove, and when speaking to him during his song and dance in the goblin camp he 'knew' the Main Character which prompted a whole dialogue with the goblin tormenting him.

I suppose it's conceivable for the story that he 'saw' the MC in the Druid Grove prior to going to the Goblin camp, but I don't think Volo's dialogue should allude to him knowing the MC if they haven't met yet.