Bunzo Bunny's fate is ultimately sealed during Chapter 2, with Mommy Long Legs killing him for failing to take out the player in Musical Memory. After the player leaves the game, you'll hear Bunzo ...

When that was done, I had to press Mommy Long Legs, Kissy Missy, Bunzo Bunny, and then Cat Bee. Once you’ve figured out your code, punch it in and then pull the lever that drops from above you.