I think it's understandable since the change is too sudden. They both have no idea how to act to each other after MC became a human. ML loves birb as his pet, so for his adorable pet to become a human of course makes it awkward. MC himself even confused how to act properly since he believed he is a bird. Before and after knowing very important things makes big difference.
Tbh even I, as the reader, am confused how to name their current relationship before MC name it as friendship. No wonder MC can't even talk back the child. I mean, there's no way he said "I'm your brother's pet" when he's in human form right?
MC was a human before, I don’t think he’s confused. It’s not like he was originally a bird. To me it’s weird that he was less confused as a bird. He could have told the brother that he was ML's friend or acquaintance, or directly criticised him for being rude. Also no, it’s not normal to treat MC still as a pet when he’s in a form of a human. I think it’s pretty clear that MC isn’t an animal.
I don’t like the ML, I don’t think he sees MC as an actual person lmao. He's still a pet to him. Also MC lost his character the moment he transformed into human, he used to be so sassy before. Now he can’t even talk back to a child.