Just ignore it haha, its actually really common behaviour in parrots, if not a little awkward.
My lovebird used to get "funky", as you put it, with the one rope toy in her cage. We'd joke about not "walking in on the bird". If you did she'd actually give you a death glare, growl, and wait till you left the room. She was an interesting one lol.
Oh, my birds have no shame! They will get "funky" even when visitors are here. Of course this is a bit embarrassing, but unless they have small children with them, they will laugh about it. And as for children, I just tell them the bird is playing.