Continuity mistake: In the side mission Creature Of The Night, Francine Langstrom is shown as deceased in Batman's detective mode, so there's no way she can be alive later as shown.
Plot hole: In the DLC side mission In From The Cold there's emphasis put on Mr Freeze detonating the cryogenics generator he's been using in his research to take out militia tanks. Given they and almost all the icebergs explode it's amazing the Batmobile avoids instantly sinking into Gotham's waters.
Continuity mistake: When you find Gordon in the mall he's wearing his jacket. When you rescue him just after your final fight with The Arkham Knight he's not. Then he's got it back later at the asylum.
Continuity mistake: In both Arkham Origins and Arkham City Mr Freeze is bald. Yet here he's shown to have strands of white hair in the DLC mission In From The Cold.
Continuity mistake: This takes place a year or so after Arkham City. Yet Joker's Titan poisoning marks look different, more like blood stains.
Continuity mistake: This is in the same universe as the other Arkham games yet Poison Ivy's gone from being green in Arkham Asylum and Arkham City to being just regular looking in this game.
Answer: He was exposed to a toxin bomb, so he probably got a bigger dose of the fear toxin.
The fear toxin only makes a person see their worst fear. It doesn't make them physically transform into it.