This means that they don't distinguish between real and pretend. The Princess they met at Disneyland last weekend was not a senior at UC Irvine trying to support herself by working at the park, but the actual girl who rode on a magic carpet with Aladdin, or the book-loving, village girl who taught Beast how to love. To Be a Bug show and Barney, the big friendly purple dinosaur in his own TV show. Yes, there are physical differences between Barney and insects, but there are some profound differences. One of the show's main characters is Hopper, the main nemesis in the original movie.
Young children are very egocentric.
When characters on children's TV shows talk to their audience, children believe they are the only ones being spoken to. Young children's egocentric viewpoints make it difficult for them to accept someone else's point of view. Using adult logic and rationalization with a young child is often futile. They see a tangible bug yelling and creating a scary environment. They know what fear is, they know it is not funny.