Little Billy liked Agatha because she was quiet! For whatever reason he can't hear her thoughts. And that was a good thing. But now it's sad because he doesn't know if she's lying now, or what she's really thinking.
He doesn't trust her because she lies, but he is also not used dealing with someone quiet on the inside. Whatever relationship they can build they have to do it the hard way.
And Agatha's visibly emotional here. Why, I wonder.
Is it because she remembers him from 3 years ago? Because she never got to see her own Nicky grow up like Billy did? Even though Billy isn't hers, she's fond of him, although she'll never admit it. The deception and hustle probably made her fonder.
Is it because this is the first time Billy's properly introducing himself to another witch? That he's finally able to connect to his people like he's never be able to before and embrace his potential? She certainly looks proud of him.
Maybe it's also because Agatha's smart. The one who finds a secret and figures stuff out.
It's Agatha who speaks his name first, probably feeling the sigil break. She knows what he did, that he took a body. Agatha may already suspect what's at stake.
Because the next thing she says after this moment is how every witch with a heart can hear him.