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In The Goblet of Fire, fake Mad-Eye Moody Transfigures Malfoy into a ferret and bounces him up and down, to "teach him a lesson".

In The Tales of Beedle the Bard, Babbitty Rabbitty and her Cackling Stump, Dumbledore comments on the difference between an Animagus and Transfiguring oneself into an animal:

Animagi do not retain the power of human speech while in their animal form, although they keep all their human thinking and reasoning powers. This, as every schoolchild knows, is the fundamental difference between being an Animagus and Transfiguring oneself into an animal. In the case of the latter, one would become the animal entirely, with the consequence that one would know no magic, be unaware that one had ever been a wizard, and would need somebody else to Transfigure one back to one's original form.

How then did Moody's Transfiguration work? Wouldn't Malfoy have lost his human consciousness during his time as a ferret, thereby defeating the entire purpose of the teaching moment?

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    I believe the whole point of the "teaching" was to humiliate Malfoy by showing him he can be transfigured to whatever Moody wishes. – Gallifreyan Aug 13 '17 at 20:01
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    Also, what about when Krum Transfigured himself during the Triwizard Tournament? Additionally, perhaps he doesn't remember his life as a wizard while in ferret form but yes the other way around - with the consequence that one would know no magic, be unaware that one had ever been a wizard, and would need somebody else to Transfigure one back to one's original form but AFAIK says nothing about not knowing what happened during the time as an animal. – Mithrandir Aug 13 '17 at 20:06
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    Considering that Moody wasn't actually Moody at that point, I doubt it was less a lesson and just Barty Crouch having some fun. – Tim Aug 13 '17 at 23:38
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    @Tim But remember, Barty successfully impersonated the man for most of a year. It can't have been that out-of-character for the real Moody. – KSmarts Aug 17 '17 at 18:33
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Moody punished Draco by humiliating him.

Even right after he’s Transfigured back, Draco seems to be aware that something bad, painful, and embarrassing happened to him, even if he didn’t specifically remember he was a ferret.

“Malfoy, whose pale eyes were still watering with pain and humiliation, looked malevolently up at Moody and muttered something in which the words ‘my father’ were distinguishable.”
- Harry Potter and the Goblet of Fire, Chapter 13 (Mad-Eye Moody)

Draco seemed to know that something went on, even if he didn’t know that Moody had transfigured him. The punishment of being humiliated in front of other students even after he was turned back would also last. In addition, if he didn’t remember being a ferret, many people at Hogwarts who knew what happened were quite happy to remind him and never let him forget it.

“Yeh’ll do wha’ yer told,’ he growled, ‘or I’ll be takin’ a leaf outta Professor Moody’s book … I hear yeh made a good ferret, Malfoy.’

The Gryffindors roared with laughter. Malfoy flushed with anger, but apparently the memory of Moody’s punishment was still sufficiently painful to stop him retorting.”
- Harry Potter and the Goblet of Fire, Chapter 15 (Beauxbatons and Durmstrang)

It was certainly an effective punishment, because Hagrid threatens to do it, and Draco shut up.

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    That could just be an instinctive reaction by the ferret to get away from Moody. – Scimonster Aug 13 '17 at 20:03

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