This one is mind-boggling. Prostration happens as an act of honor and worship to someone who is greater than yourself. We prostrate towards God because he is the highest of honor.
So what are we to do with this one? Muhammad prostrated to a dwarf? 
Was a dwarf greater than Muhammad? And if Muhammad is the highest moral example, perhaps there are those that even greater? Dwarfs? So should people being show more honor and respect to dwarfs?
This one is baffling.