Sir Ridley said:
The puppet is pretty great otherwise, but the mouth is so important for his appearance. It looks like he lost his teeth.Hence my argument that a muppet should be used for Yoda, but with CGI mouth movements. In fact, I see no reason the same approach couldn’t be taken with a host of characters that are either animatronics or actors with prosthetics. The Nemoidians are examples of the latter, and while they were lame characters anyway, because of the writing, at the very least they would have looked better if their mouths had been animated.
The issue is not that it was a puppet mouth, the issue was that the mouth was the wrong shape and size comparative to ESB&ROTJ