It makes him happy that the daozhang was worried for him and hoping he would return. It means that they really are past the point of his fears and can finally move forward at least as friends. Perhaps the moving of him into this room is to help with that.

He looks down at the fox in his lap, a surprised expression on his face. He picks it up and looks at it, studying the expression on the toy and running his hand over the soft fur.

He laughs a little, "You think I look like a fox, daozhang?" He is amused but also touched that Xingchen would get him a gift.