He remembers being one of the Fae who decided to leave the land outside the Shadows' Realm and live within the Shadows. Usually he thinks of himself as a peaceful, kinda quiet Fae. Leave him alone, he says little and goes about his business, but when he is mad, watch out.
He has a little of his cousin Rumpelstiltskin's temper in his veins and how his face turns bright red when he is upset. Therefore, the name of Scarlet has stuck ever since.
He stays pretty busy keeping them in the stables until it is time for them to go out at night. Scarlet does not have the same anger at the Outies and the Dragons as the Nytemares do, so he does what he can to keep them in check. In doing that, he has kept this shape now for so long that even he does not remember his real form anymore.