At sunset, the man in the yellow suit saunters up to the Fosters' fence. He watches Winnie trying to catch fireflies and calls out to her after a few minutes. He tells Winnie that he used to catch fireflies when he was a child. As he speaks, Winnie notices that the man's body moves continuously but gracefully, "like a well-handled marionette." Winnie is instantly put off by this, but thinks that he looks friendly and so answers his questions. She explains that her family has lived in this cottage for a long time; her Granny was born here when the wood was still a forest.
The language that the narrator uses to describe the man in the yellow suit--including not naming him--functions to dehumanize the man and make him seem scarier and less like a real, living person. Though at this point he does just make Winnie slightly uncomfortable, these descriptions take on more meaning later when the reader learns that he wants to sell immortality--in effect, he wants to turn everyone into an inanimate marionette, just like him.
The man in the yellow suit insists that if Winnie's lived here so long, she must know everyone. Winnie says that she doesn't and suggests that the man speak to her father. The door opens and Granny steps onto the porch. Winnie calls her over and the man greets Granny by calling her "fit," which offends Granny. The man doesn't explain why he's at the gate, but says that he suspects that Granny knows everyone in the village. Granny suspiciously says that she doesn't know everyone and doesn't talk about this sort of thing with strangers in the dark.
Winnie's choice to try and redirect the man in the yellow suit to her father shows that she does trust her parents to care for her; she knows that this man is strange for wanting to talk to her instead of an adult. This indicates that though Winnie is still an immature child, she also has a finely tuned sense of other people's trustworthiness and understands that this man isn't actually her friend.
After a moment of silence, Granny, Winnie, and the man in the yellow suit hear a tinkling bit of music coming from the wood. Wide-eyed, Granny gleefully tells Winnie that the music was the elf music she's told her about. She grabs Winnie to lead her inside, but the man in the yellow suit eagerly asks Granny if she's heard the music before. They all listen to another wisp of the music and when it fades, Winnie suggests that it sounds like a music box. Granny leads Winnie inside. The man remains at the gate for a while and gazes at the wood. He looks satisfied and when he finally turns and walks away, he whistles the melody that he heard coming from the wood.
Though Winnie implies that Granny is a boring old lady who only cares about order and cleanliness, Granny's glee at hearing the "elf music" suggests that there's more nuance to adulthood than Winnie currently allows for. In other words, Granny is living proof that adulthood doesn't have to mean that a person is boring and has no interests; it's possible to be an adult while also retaining a childlike sense of wonder and fantasy.