Question: In the scene when the Mad Hatter is "fixing" the rabbit's watch, the Hatter exclaims "It was!" before the rabbit states that the watch was an unbirthday present. Is this on purpose? Or an editing mistake?
Answer: I think it is an editing mistake. The Mad Hatter is way too excited as if he had just heard it was an unbirthday present.
Answer: Actually, the White Rabbit sees his damaged watch, says "Oh! My watch". THEN the Mad Hatter says "It was!", then the White Rabbit says that it was an unbirthday gift. So the exchange of dialogue makes sense.
CCARNI ★