Could my student visa get rejected because of this?

I tried applying for mext before but failed(already had N1 at that time), so the embassy kinda knows me to some extent. Could they deny my visa for a language school thinking that I'm not interested in studying due to already having N1, but doing something else in Japan?

You are asking us about possibility, so the answer is: yes, they could deny you for that reason.
But if you ask us about probabiity, I would say there is minimal chance of them denying you a visa as long as you satisfy the requirements. This assumes you don't have any suspicious activities in your background that would cause them alarm.