They're supposed to have outlines. 
All I'm saying is, it looks bad, regardless of whether or not it was a stylistic choice. If it is there's certainly better ways to go about it. If you thought I meant "having an outline on the outside", that's not quite what I meant. I meant more having them all over their insides in order to define shapes. While very faint, you can still see the lines, thus shapes seem more...
Over-defined once you notice.
...But I think your main problem here is the lighting. Here's a quick bunny-statue edit in which I fixed it. (Sort of.) Not sure how I'm going to achieve the "watercolor" look, though...
By the way, I might have added more contrast to the palette. Judging by the minuscule size of the sprites, namely player, the final game looks like it's going to be played at... 2x? In which case I suppose the lines will be bigger and thus more noticeable, but contrast is good anyway.
