I remember being convinced that the little Muppet was the Jedi Master because i was familiar with fairy tales. Luke was being tested. It was far too obvious. Lucas is many things but subtle isn’t one of them. But still it was clever and Frank Oz did it so masterfully you almost believe he is a real living breathing being. Mark Hamill is a good part of that as well though, because if he didn’t sell it in his performance it would have fallen all apart. With one of the very best scores every written for film, and one of Williams finest achievements.
All this too. Hamill, Oz and Williams’ music all give it that sense of realism, and almost an enchanting quality.
Hamill rarely gets the kudos for his acting in his Dagobah scenes, and it is easy to see why some people wanted to see Oz nominated for an Oscar (not the grouchy version) for his masterful performance.
Everyone involved really did help the scenes become more than the sum of their parts. I do get that feeling with Empire probably more than other Star Wars film.
All whilst still maintaining that delicate balance of being grounded and believable, yet also otherworldly, with that “enchanting quality”, as you say.