When done properly, the Chao will absorb the animal as if you had given it to the Chao directly. However, instead of letting your Chao grab the small animal off of you - you can trick the game by placing the small animal directly in front of the Chao. Usually when you give a Chao a small animal, the Chao grabs it, embraces it, and then the animal bounces up and away from it becoming un-interactable and disappearing shortly after when off screen. I’m sure that with your first few Chao you kept repeating levels over and over again just to raise your Chao’s stats!
Since you can only have 10 Chaos Drives or animals at a time, this becomes very repetitive. It requires you to collect a maximum of 10 Chaos Drives and/or small animals within the levels of the main game, going into Chao World afterwards to give them to your Chao. Raising your Chao’s stats normally can be a long and tiring task. Probably the most famous glitch in the game, and essential to know for quick, efficient Chao raising. Some are useful (some would say essential even!), and some are just quirky. There are a few glitches in the Sonic Adventure series relating to the Chao system.