Early sprite art was an exercise in interpretation. What one person saw as a headdress, other people saw as a face. Over on Reddit's r/gaming, that principle of interpretation is having people questioning whether Toad is someone you want being around your kids.
Most likely, Toad is just holding his palms out in celebration of no longer being kidnapped, but it's not hard to interpret that another way. In this interpretation, Toad doesn't really care about Mario's trials and tribulations in having to go to another castle for the Princess, he's just glad to be out.
Actually, that raises a different question: when Mario frees Toad, does he just walk backwards through the world Mario just went through? Is Mario even making sure he gets home alright?
[Source: Reddit]