Should I report apparent conflict with handling editor during peer review?
You have not identified any conflict of interest in your post.  The managing editor can, and should, criticize your work.

It seems that the colleague who invited your paper mislead you by failing to clearly state they were not actually editing the special issue.

The reason you have not encountered this situation before is that most editors are not thorough enough to provide their own advice to the authors.  This is unfortunate.

Do not claim someone has a conflict of interest unless you have solid evidence.  The evidence needs to show that they have some way of directly benefiting from the rejection of your manuscript.  Unsupported claims of conflict of interest hurt your reputation.  Your negative reviewer is much more likely to be lazy, rather than a competitor.