Peter wasn't talking to you... He was talking to something else in his head. Almost looking like he had lost in after falling down to earth.. He was still talking to it as you stared down at him.
"It's safe to touch at least for me. I don't know what exactly this is, or if it's safe.. Maybe I should just lean into it and see where it'll lead me.."
Mysterio kept talking to Peter, and the subtle words were meant to put doubt. To hurt him on the inside, to undo his progress.. He wanted Peter to lose control again.
"Mr. Stark? Hey... Mr. Stark? Can you hear me? Its peter. Mister Stark. I'm sorry for what I did...Tony..."
"Maybe I wanted it to happen! Mr Beck should've killed me when he had the chance but you saved me!....He's the person that's going to kill the monster..."