I’m betting there is a connection between evil-Lottie and mini-chibi-Lottie, like maybe mini was a spy for evil-Lottie, or maybe even evil-Lottie herself in an alternate form? I got the impression that none of the “real” characters in the story ever saw it; maybe it was invisible to them (and more than just the artistic wink that we took it for)?
Of course this would all have to be supernatural stuff; is that off the table?