The first time we hear the music to the song is when Truly (played by Sally Ann Howes in the film) motors up to the Potts' windmill with the children.
It is later sung to her by Adrian Hall and Heather Ripley (as Jeremy and Jemima), the twin children of widower Caractacus Potts (played by Dick Van Dyke in the film), and she sings the second verse back to them.
It occurs at the beach scene in the middle of the film when all the characters begin to fall in love with each other.
Truly sings the counterpoint as an expression of her own, "real life" emotional detachment.
The rag doll keeps trying, when suddenly he captures his own reflection and realizes how foolish he appears.