Avatar: The Last Airbender is full of hybrid animals. There's Appa, Avatar Aang’s beloved sky bison. Naga is Korra’s polar bear dog. The ancient lion turtle is another example of the unique creatures that inhabit this world to the point that Aang and his friends think it's weird when the Earth King has a pet bear that's not a hybrid with some other animal. But why is the world of Avatar full of these fantastical creatures? The answer may lie in the best episode from The Legend of Korra
In Korra Season 2, the famous two-part episode "Beginnings" tells the story of the first Avatar, who formed an eternal bond with the light spirit Raava to defeat the dark spirit Vaatu and keep the world from falling into chaos. The story takes place 10,000 years before the events of Korra at a team when spirits could travel freely between their own world and the human one. And we see several times that when a spirit merges with a human, it causes them to grow animal or plant features that never go away.
Before the story begins, Wan's friend/roommate has been turned into some sort of tree man, and later, the spirit aye-aye protects Wan by temporarily merging with another human and turning him into a lemur hybrid.
Why does this matter? Well, Reddit user caduceuz contends that if the spirits can turn humans into these hybrids, they likely did the same to animals. This could explain how both bears and platypus-bears can exist in the same world (and why the regular bear is all the more rare).
In Avatar, the spirits take all sorts of forms. Some look like animals, while others are more symbolic. As one commenter suggested, this theory could also explain that discrepancy. Maybe the spirits that temporarily merged with animals also took on some of their traits in return.
What’s more, many benders learned to master their skills by training with the original benders — Toph mastered earthbending from badgermoles, Aang and Zuko mastered firebending from dragons, and so on. It’s possible these creatures merged with animal spirits centuries before to become the first hybrid animals.
The Inverse Analysis — There's quite a lot of evidence behind this theory in The Last Airbender’s mythology. After all, there’s nothing indicating that spirits cannot inhabit animals just like they do humans. And one of the reasons Avatars tend to have hybrid animal companions is because they’re connected to the spirit world in ways humans are not.
Avatar: The Last Airbender and The Legend of Korra are streaming on Netflix.