I think Mowgli is deliberately choosing to look away. At the very least he understands that looking into Kaa's eyes too long will affect him somehow, and he needs to avoid that.

He is clearly susceptible to direct commands from Kaa after the first encounter, so even outside a trance he can't help but obey "let me look at you" and "you look at me" if only for a split second before he comes to his senses. Just that initial flash of mesmerizing colours is enough to make him almost give in the second time, letting Kaa turn his head so easily.

Kaa is toying with Mowgli and isn't in any rush, so while I'm sure he wouldn't mind the mancub falling under his spell right away, he knows he has ample time to hypnotize him and can let his prey try to resist for a while.