I assume you wanted this as popups. First off all the %user isn't set so when anybody uses wolf two it comes back incomplete. It comes back as "me transforms back into ". I believe you wanted the person to go back to themselves. Also your coding can be simplified. This at best is untested and incomplete

menu nicklist,query {
  .[Wolf Attacks} 
  ..[-Transform/Lay-]:{ me transforms into a wolf and lays at $1 $+ 's feet }
  ..[-Transform Wolf-]:{ me transform into a wolf } 
  ..[-Transform Back-]:{ me transforms back into themselves }
  ..[-Eats-]:{ me attacks and eats $1 }
  ..[-Attacks-]:{ me attacks $1 }
  ..[-Walks-]:{ me walks over to $1 }
  ..[-Snarls-]:{ me snarls at $1 }
  ..[-Sniffs-]:{ me sniffs $1 }
  ..[-Watches-]:{ me watches $1 closely }
  ..[-Protects-]:{ me protects $1 }
  ..[-Defends-]:{ me defends $1 }
} 

You misspelled snarls, and you also repeated a couple of them. I also changed the things from wolf so you could tell what each did with out having to test each of them.