This is the 15084th most frequent German word.
spielender
"Spielender" means "playing" (a person who is playing).
'Spielende' describes the present participle of the verb 'spielen', used here as an attributive adjective denoting the dog's action of playing.
Der spielende Hund ist glücklich.
The playing dog is happy.
'Spielender' acts as a descriptive adjective in its masculine singular nominative form, conveying the ongoing action of the musician playing an instrument.
Ein spielender Musiker beherrscht sein Instrument.
A playing musician masters their instrument.
'Spielende' is the attributive adjective in this context, modifying 'Eichhörnchen' (squirrel) to describe it engaging in play.