The Fuzz Brothers are chin puppets performed by Jim Henson and Jerry Nelson. Puppet parts were added to the performers' faces to create the puppet characters, with the image inverted so it is upside down. The puppets' mouths are actually the performers' mouths. The puppets' hair is actually the puppeteers' beard, while the puppets' beards are the puppeteers' moustaches.
Although traditional chin puppets are usually performed with the puppeteer lying on their back with their chin in the air, for the Fuzz Bros. the Muppet performers were comfortably right side up, standing with their bodies hidden behind a bluescreen, and the image was flipped electronically.
Close attention to their "chests" reveals that dangling elements of their "costumes" are defying gravity; the performers' heads were right side up and the picture was inverted.
The Fuzz Brothers sketch was released to video in the Playhouse Video: Gonzo Presents Muppet Weird Stuff.