This comes from his Satires 1.10.20-35, where he pokes a bit of fun of Lucilius (the subject of the first sentence in the quote below):
'at magnum fecit, quod verbis Graeca Latinis
miscuit.' o seri studiorum, quine putetis
difficile et mirum, Rhodio quod Pitholeonti
contigit? 'at sermo lingua concinnus utraque
suavior, ut Chio nota si conmixta Falerni est.'
cum versus facias, te ipsum percontor, an et cum
dura tibi peragenda rei sit causa petilli?
scilicet oblitus patriaeque patrisque Latini,
cum Pedius causas exsudet Poplicola atque
Corvinus, patriis intermiscere petita
verba foris malis, Canusini more bilinguis.
For convenience, here is Kline's translation:
‘But it was a great achievement to blend Greek and Latin.’
O tardy students, if you think it’s wonderful
Or hard to do what Pitholeon of Rhodes achieved!
‘But a style harmoniously mixing both languages
Is more delightful, like Chian and Falernian wine.’
When you’re writing verse, I’ll ask you, or also
When you’re pleading Petillius’ long hard case?
Would you really prefer to forget home and country,
And while Pedius Publicola and Corvinus sweat
Over their cases in Latin, mingle foreign words
With your own, like the twin-tongued Canusians?
Horace isn't talking about mixing Greek and Latin roots in general, but rather about using Greek words in a Latin poem, with the implication that it's used in a pretentious way, replacing fine Latin words with Greek ones to show off one's airs. If you have access to Emily Gowers' green and yellow commentary on Satires 1, she goes into much more detail there. One justification for this reading is that Horace in fact does use Greek words when necessary, such as comoedia and poemata a few lines above, though these words had long been incorporated as regular Latin words.
Of course, using mixed Greek and Latin roots in poetry would also be unacceptable, and Horace famously opens the Ars Poetica with an indictment of blended poetical forms. Lucilius was also rather famous for clunky Latin compounds, i.e. coining new Latin words on a Greek model that honestly doesn't really work in Latin (magnanimous notwithstanding).
It's possible to see Horace's invective carrying over to the practice of combining Greek and Latin words (since, as far as I know, Horace doesn't do that), but I don't think that was a common enough problem for him to address directly.