This is the first time we've seen the monster, and it's not like he's weak. He's got a good punch, but he can't use his sword's unique ability to cut through the soul of a dead body. Shmoopers are so happy to see that Shmooper has become a real hero, and they're proud of him for it. They're also proud of how well he defeated the monster. They all look at each other like, "what the foul creature is?" Shmooping, they all go back to their normal selves.