Main dialogue
You might have noticed it, but... the Teddys are being controlled by the force of evil. Looking at the Teddys, knowing that their souls are being controlled by someone else...
Accept
The monster you're dealing with is Master Soul Teddy, and you'll notice that a huge evil ghost hovers around it, controlling its every move.
Go down below and fight the monster, and you may be able to gather up the freed-up souls of Master Soul Teddy. Bring those souls to me, and I'll do what I can for them to regain their freedom.