Even if it's a joke, it doesn't seem terribly therapeutic to make one there, especially when LT is clearly feeling insecure and making herself vulnerable. I used to use humor a lot to try to gloss over uncomfortable feelings. It would not have been helpful for my T to encourage that strategy, rather than digging into the uncomfortable feelings.

As for transitional objects, I have done stuff that's way "weirder" than holding my transitional object, like making a weird little therapy scrapbook, for one. Holding the object is kind of the point, isn't it? My T knows that I have had mine in my pocket every day since she gave it to me, which was over a year ago. She has also given me supplemental objects, held onto the object to recharge it, and taken it on vacation with her, at my request. If holding it is weird, then I have crossed over into the truly bizarre. And my T doesn't seem to mind at all.