Merlon Mario and Luigi Bowser's Inside Story

[Garamonde]

I think what you're doing is putting shading along the inner outlines of the top of his beard (which you should probably not do), instead of shading it more on the bottom/lower parts that are further away from the light, making it look banded/pillowed. After all the light source is coming from above the character's head, not in front of them. Hopefully I made that understandable. Otherwise, someone who knows this style might have to make an edit to better demonstrate...