A random encounter with a neighbor

I had an interesting experience today on my evening walk with my dog. One of my neighbors hugged me. Now, before you freak out, one, the dog was with me and didn't get upset so he must be non-threatening (she would have barked/freaked otherwise), and two, this is someone I see regularly. He plays his drum over by the Zoo for the zoo-goers coming and going to the main parking lot. My daily bike commute takes me along the path between the entrance and the lot, right past where he sits. I see him pretty much every day when the weather is nice. And every day he shouts a greeting and waves at me.

Now, when I get home, I change out of my biking clothes before I walk the dog. Often I see him walking home from his spot by the Zoo. Turns out he lives probably a block or so from me on another street. So I walk by his house everyday with the dog, and I know he's seen me. But he didn't recognize me as the same person who biked past him.

That is, until today. Today when the dog and I walked past him while he was standing there talking to another neighbor, he looked at me and said: "Hey! You're my bike chick!" I smiled and confirmed this and started to walk past him. And then he hugged me. No sh*t. Just hugged me. Needless to say, I didn't see that one coming and was stunned momentarily. Based on his breath I'm fairly certain he had started happy hour for the day a few hours early, so he was in quite the good mood. My neighbor that he had been talking to chuckled and told him to "leave the poor girl alone." I just smiled, pulled myself out of the hug, told him I'd see him later, and kept walking.

Really, what else could I do?