The russet bear has reddish hair and likes the sweetest things. It will follow you about hoping for more if you feed it berries or cream. Whistle a song it will amble along and dance the happiest dance. Any who see the Russet Bear dance will wish to join in (save at -2, fairy tale magic is powerful). It has different dances for different tunes:
The twirling dance (twirling, dizziness afterward, prevents attacking etc.)
The hide and seek dance (all viewers flee while the song lasts)
The ring-around-the-rosy (all viewers come in close and link hands)
The single file dance (all viewers form a conga line and follow the bear which will follow the tune maker)
Set a simple tune that players might know like Happy Birthday or the Do Re Mi song, or the William Tell Overture for each specific dance. That way players will have to experiment a bit to discover the different dances. And have actually actually whistle the tunes they are trying, heh. The song doesn't have to be whistled in game, players could use instruments or hum. To clarify who is affected you could say anyone whistling along is not. So the whole party can be safe as a dance starts and savvy foes might start whistling too.
The bear will usually wander off in the night unless the party goes to great pains to keep it stocked on lots of sweet foodstuffs.
So the bear is less a monster than an awkward magic item. I tried to keep the dances whimsical but potentially useful-- say the players are ambushed and have the bear tagging along-- start up the hid and seek dance and the ambushers will clear out giving time for escape. It might be more about hijinks too, like taking the thing to court and making all the nobles do the conga. Or I suppose the Russet Bear could be following a troubador npc and be used against the party.
Update: After posting I'm feeling I didn't get the tone quite right here, it's a little too twee. With the last two posts I was trying to get the creepiness and threat that seems to underlie the apparent childishness of fairy tales. To get more of that here, I might make the dances more frightening - the twirling dance like the tarantella will dance people to death, maybe add London Bridge which will send dancers over cliffs like waves of lemmings at each chorus of "we all fall down." Something to make players a little afraid of the bear themselves. Hmm, maybe if you don't keep it fed with sweets it will make you dance.