It went down like this:
Cat appears to overstep his boundaries, pawing stuffed iguana. Real iguana is not cool with that and gets all up in cat's face.
Cat can respect that. Cat graciously bows out of the fight.
Somehow, this isn't the first time we've seen a real iguana get into a conflict involving a stuffed one. Just last month, a particularly aggressive iguana lost all chill and preyed on his stuffed companion.