That's a pretty tame moment, if you ask me. It's not even half as wild as the more famous, more funny Muppet Show version at any rate.
No the weirdest moments come from wild animation that feels completely out of place. That bit about the kids being chased by the giant, ugly rabbit. Now, that's not only weird... it's kinda creepy for an American kid's show. If it was a lost segment, I'd swear it was a creepypasta by that description. And there's no educational content, making it even weirder since it somehow, illogically, got past the filter of irrelevant, noneducational animated segments. Even the creepy bird thing taught kids how to read "bird."