I'm not sure it does, having given it another look - I think because it's so small, the fur can't be as detailed, so it's a bit difficult to tell what's solid body and what isn't. It looks to me like the red outline is the actual head, with the rest being fur. I could be wrong, but if I'm not, this looks good to me (and if I am, it still looks like a sand cat's head, just a bit too big, so an issue of proportion rather than design, which I'm willing to blame perspective for, unlike the original hyena).
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