This might be the only sequence without the presence of any of the main characters. As such, it's purely exposition where we learn that Pleasure Island is not a place that Pinocchio should be going.
However, within this sequence, there is some character development. We learn how truly small-time Honest John and Gideon are. The bag of coins that Honest John received from Stromboli is miniscule compared to what Stromboli earned from Pinocchio's appearance. We also get a look at the Coachman's swag, so we know that he's a bigger player than Honest John.
Honest John moves his finger across his throat, implying that he's comfortable with murder for a price, but when he hears about Pleasure Island all of his bravado disappears and genuine panic sets in, reinforcing that the character is all show and very little substance. Only Pinocchio's inexperience allows Honest John to accomplish anything.
The coachman appears benign, quietly smoking his pipe and casually explaining his plans. Where Honest John panics, the coachman is confident of evading the law and the memorable close-up where he says that that never come back "as boys" clearly demonstrates that beneath the doughy exterior is a criminal far more lethal and cold-blooded than Honest John could ever be.
The draft for this section is a little confusing. Shots 25, 27, 31, 34, 37 and 40 have only the coachman, yet Nick Nichols and Norm Ferguson are both credited. I don't know why that is. The coachman's most impressive shot, 42, is credited to Nichols alone.
This is another sequence that Shamus Culhane claimed to have worked on, yet Norm Tate is credited with much of the Honest John footage. However, Ferguson's work in shot 41 is the best Honest John acting in the sequence. Perhaps sequence director T. Hee felt that Tate wasn't up to the acting challenge. That shot, and Nichols following shot 42, are both important for communicating how big a threat Pleasure Island and the coachman actually are.
There is a visual pun that probably goes unnoticed these days. One of the slang terms for a doughnut is a sinker. When Honest John says that Pinocchio fell for it "hook, line and sinker," the camera is on Gideon, dunking a smoke doughnut into his beer.