Im so glad you asked haha! Joels bit was about how the gods of empires have been systematically dying out and he thinks hes the only god left since he also as amnesia While sausages bit is when he had to run away from his old kingdom bc the king like nuked the place out of greed (who turned out to be his bio father)

Seriously

in this context that kid is hermes. The guy with wings (joel) is a god of the sky and storms and the last one of his pantheon but he has forgotten the other gods almost entirely while the guy with the scar (sausage) fled from his original kingdom after the king ordered the extermination of anyone in the kingdom with magic (in his case he can speak to animals) and build a new kingdom called sanctuary far away with other refugees. Hermes is their son but they arent necessarily a couple, still they co-parent him and love him. The big rabbit that shows at the end is sausage's adoptive father (eddie), who raised him after sausage's mother died under mysterious circunstances working at the castle, so he is basically hermes' grampa

So, at first he was just an armor-stand prank between Joel and Sausage, but people loved their interactions through him and signs he "carried" that he became (in the canon of Empires SMP S2) their son who goes everyother episode to one of his dads and he carries a present with some kind of text for the other parent with obvious double meaning. That's how he got his name Hermes.