Huggy Wuggy is a rejected, conked out Muppet who had been thrown away in the trash a long time ago where he had nuclear waste dumped all over him. This, therefore transformed him into the thickheaded, colossal misfortune he is today. So much of a misfortune in fact that the media held him hostage and shoved him into a generic, pathetic horror shame that rips off Bendy and the Ink Machine with supposed 'lore' that asserts itself to be appalling but in fact just turns out to be a plaintive effort at doing so. The media had no clue that this was a Muppet the first time around, so of course he would have been treated as a regular, boring monster in some other form.
Contrary to the beliefs of many unsophisticated children, Huggy Wuggy is anything but scary. He literally looks like a rejected blue Muppet with teeth and a staggering height of around ten feet tall, which the media considers scary for some dumb reason. Huggy Wuggy was oddly enough, proud of his ability to frighten individuals (not like he ever cared about it in the first place). Despite all of his pathetic attempts at frightening people, he only ever manages to scare away preposterous, stupid blockheads who have been indoctrinated by the media into assuming that he's 'spooky', even though he quite clearly is just a pathetic attempt at being scary.