There is a hole under the carousel, someone has got stuck in it but the others don’t want to stop the carousel.
A leg, or similar limb, comes flying out and maybe it is the mayor who has got stuck under the carousel.
The carousel master fills in the hole and insists that the carousel must go on.
You never saw the mayor again so I think it must have been him.
Initially the puppets are sad but quickly they are fine, almost as if nothing has happened.
This episode’s song was really reminiscent of “There’s no business like show business” and was about keeping the carousel running.