If I remember correctly Sir Ian McKellen was saying something to himself like: "this isn't why I became a actor" commenting on that everything is green screen and you hardly act off against another actor.
Basically, the skin of melons is called a rind. The “outta your rind” sentence is a play on words on “outta your mind”. Watermelon doesn’t think that this play on words is good enough, and starts to doubt his time or effort to take part in this acting job because it seems that Watermelon especially went to theatre school in London to prepare for this scene. Watermelon has an existential crisis while the rest of the people involved in recording this scene are confused about Watermelons reaction.
