Ernie lowers Bert's volume.
Ernie sculpts Bert's bust, but forgets something.
These types of gags are signature Jim Henson schtick and very common in his other Muppet productions, but actually pretty rare on Sesame Street. There are two other early Sesame Street bits that I know of involving Bert's detachable nose, so apparently it was originally meant to be a running gag, but this is the one that most of us know best and, I'd be willing to bet, the only one most of us have seen. So much for the running nose gag (rimshot).
The impression I get, which may not be entirely accurate, is that initially the Muppet inserts were rather separate from the rest of the show, and that Henson and his troupe were more responsible for writing them at first, so that they more often reflected his somewhat twisted sense of humor. For whatever reason, but due at least in part to Henson and Co.'s increasingly busy schedule, the onus of writing the Muppet inserts on Sesame Street shifted to the show's regular writers.
It always amuses me somewhat when I hear parental concern about kids potentially being traumatized by finding out the characters are puppets. How do you not know that they're puppets? I myself never had any illusions in that regard; I knew they were puppets, but it didn't matter to me. If anything, it allowed me to enjoy the show in general, and the Bert & Ernie sketches in particular, on multiple levels. On the one hand, I loved Bert & Ernie, I laughed with them and identified with them and effortlessly suspended disbelief. On the other hand, I was fascinated by the way the puppets seemed to come alive. I said yesterday that I was fascinated by Bert's eyebrow motion, and this is why. I loved wondering and mentally speculating about how exactly they made that work.