You know, when the head and the legs are on the inside of the shell; a two year old just might think it's a pretty rock and try to hold it. The two year old might get a little scared when the rock sprouts a head, legs and moves.
My mom told me that the first time I saw a turtle ( I was two) and I said, "I see that rat in that rock." So I think your observation is correct. And that is the cutest lil' thing!