Yes. What you are seeing below is indeed a rug made out of stuffed animals. Sewn together. With their stuffing removed.
I am as unsettled as you are — as are no small number of commenters at the craft page on Facebook where this was posted. My best friend, however, wrote that she “LOVES” it — because she is a terribly misguided soul, despite her brilliance, and we still have a long way to go with her.
To me, this seems like “The Texas Chainsaw Massacre” meets the Island of Misfit Toys …
Or maybe … Toy Gory?
Silence of the Lamb Chop?
The kindest joke I can think of is Joseph and the Amazing Teddycolor Dreamcoat — and somehow that is only marginally less creepy.