The 35-year-old psychotherapist, who shared his experiences as a female-to-male transsexual on the reality TV contest, was visibly furious with Bassingthwaighte when she eliminated him from the boot camp round.
After Phoenix glared at Bassingthwaighte she said that she was scared and has now told the Herald Sun: "That was meant to be off camera. It was very uncomfortable [but] it's always hard when you don't make it to the very end and you almost get it and it doesn't happen.
"I'm emotional at the best of times but I've never felt more emotional than I have during this show. It is a reality show, but it's really people's lives. It is their dream. You're making or breaking someone's everything. But it's not the end."
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Bassingthwaighte added: "You kind of forget there is this story. Paige is a guy. You never really questioned it."
The top twelve X Factor contestants were revealed last week and included Tyla Bertolli, Andrew Wishart, Jacqui Newland, Reece Mastin and Declan Sykes - who recently opened up about his autism.
Watch one of Paige Phoenix's auditions on The X Factor Australia below: