[ Diplomatic is one way to put it, yes. But he knows Toph. She and her friends may frequently be involved their own brand of nonsense, something that he occasionally feels the need to intervene on, but he wouldn't expect this—at least not unless there was some reason for it. So, given her honest reply, he's quick to believe her. ]

I figured as much. Admittedly, some of the things going missing are a little too... big to have been snatched up anyway. At first, it seemed like an accident, things being misplaced — but there have been too many reports.

[ Not to mention that it just seems to be a town-wide addition to the hallucinations, but he's trying to pretend that isn't happening. ]

Why do you ask? Did you see something?