That is a great clip, though I can kind of see why it hasn't aired in years (well, besides the fact that it has characters who haven't been on the show in years).
It seems a little weird to have a character dressed as a devil on the show. A few parts seem a little creepy (like Maria, dressed as a devil, coming out of Oscar's trash can with a deep Frank Oz voice, or the talking wall, something about those random monsters also seems odd).
If not for the variety format of the show, I'd call this a big-lipped alligator moment. It seems to be one of the weirdest Muppet/street segments (it seems like most of the weirdest moments from the show are animation segments). It is very wild, and it seems like a lot of effort was put into this. There's many set changes (I wonder how many of those sets were in the same room) as well as a few costume changes (especially with Maria, Gordon, and Bob).
I wonder who performed that one monster who yelled "SURPRISE!" at one point. I'm guessing Frank Oz is the most likely choice, as he is known to have been very active in this and Caroll Spinney is the only other performer, but it seems unlikely they'd have him perform a random character who wasn't Big Bird or Oscar (or maybe that was meant as an inside surprise), but the voice sounds more like a gruff Jim Henson or Jerry Nelson voice, but if it was either of them, I'd expect some of their characters to show up.
I was surprised to see that Tony Geiss wrote this. I was expecting it to have been written by Joseph A. Baily, since he wrote about it in his autobiography.