I would definitely agree with Kevin, and also Frank. I remember in Sonia Manzano's archive interview, she mentioned a time where she had to do a scene with Grover in the library, and she kept glancing at Frank underneath. Frank, as Grover, responded, "Don't look at that man down there! I'm talking to you!"
When it comes to ad-libbing, I think of it as also having the ability to stay in character well, and most of the Muppeteers can do that. Frank, Jerry, Dave, Steve, Kevin, Fran, David...the list goes on.