Seth notices the terror and just...
Instantly deflates. Of course she's afraid. Almost everyone is. It's always 'ew they're so creepy' or 'wow this is so weeeird', and it has most definitely made Seth extremely insecure about his puppets.

He goes to retrieve his phone from a nearby table, though not before making Marion look aghast at Matilda's appearance.

"Hey."

He's honestly so tempted to just point Matilda to the door but he doesn't want to be rude.