Oh, I purposely made parts 1 and 2 as uploaded images so that people who are logged in can see the research into this rather obscure BE instance. It has all the ear marks of an Easter Egg, however from what I can tell this may have been an intended mechanic of this game character but it was scraped along with several other side-story elements and other game events as the end of the year deadline approached.
Scattered around the game are some clues that a few of these side-story bits were not fully removed.
Kraban's 2009 work also came to mind when thinking of a BE fairy.