A creature out to hurt people or worth being afraid of wouldn't be carrying a lantern around in its mouth, probably. And would probably be more sneaky than just trotting along out in the open.

He guesses at the gesture, "You are Link? Okay. Good." They pause, frown at the lantern, and realize, "It's red. Like mine when the arm went crazy." Does that mean red means physical changes? "Can you usually turn into a wolf?"