During chapter 3 you'll have to incinerate a teddy to obtain a key, to get the toys are for kids trophy you'll need to wear the teddy bear hat whilst burning the teddy. Here is my own video guide that shows where the teddy hat is and how to get this trophy done along with all of the other trophies Little Nightmares 2 has to offer. This particular trophy is shown at around the 12:30 mark in the video.