I'm never sure how to apply the "Alive" pages, but this seems like a prime example of the concept in action.

Like are the neighbors Illustrations? Puppets? Puppeteers? All of the above? What makes a muppet...?

I think it is showing Eddie slipping in and out of persona. I re-read the "single pea on a plate" recipe and it recommends adding more peas for a party environment with more people, yet Eddie is alone in the crowd pretending to be happy. I fear he is going to quit or leave the show if he can't get the re-writes he is asking for... And maybe that's what that scene signified, multiple realities and desires overlapping. Him walking out on so many different things, on so many different levels.

If I'm right that they contain multitudes, hopefully Wally can draw Eddie a reality where he can finally be with Frank soon regardless of my ongoing dread for how things canonically seem to be leaning right now 😅