Depending on how exactly the whole festival sequence is cut together, maybe Rey could even be looking around aimlessly, then she hears “Dooba jabba Skywalker!” Or whatever, and that’s what causes her to look over at the puppet show?
And then it could be something like Luke hopping up and down around the walker, saying “Ha ha!” And the kiddies laugh at that.
Omg this. Totally.
And DZ, I believe that is the intention. He is considered a myth in TFA, the myth is proven factual in TLJ, and it brings the entire galaxy together in TROS.