Why does Windows think that my wireless keyboard is a toaster?

Reason 1

Because Microsoft made a toaster driver sample. In the sample there is the line <DeviceIconFile>Toaster.ico</DeviceIconFile> and there is a chance that your keyboard manufacturer took that sample.

Reason 2

Look at the back of the keyboard for some place to insert a slice of bread…

As for "why specifically a toaster", "Toaster" is an old catch-all name for "any arbitrary device." For example, you can find "SCSI toaster" alongside "SCSI disk", "SCSI tape", and even "SCSI scanner" (yes, scanners used to be on SCSI) in some very old Microsoft slides depicting the storage stack.