It sounds like a respiratory issue, especially if you’re seeing eye symptoms. Like with humans, when we have a stuffy nose, it can cause our eyes to get watery or produce more of those “eye boogers”.
Nasal irritation can be increased by dusty hay. Teeth grinding, if it’s loud enough to be heard, is a sign of discomfort/pain that should be assessed by a rabbit veterinarian.
I would try to shake out the hay a bit before feeding it to reduce dust and see what occurs. If you find discharge becomes apparent, or maybe there’s signs of frequent sneezing, or the eye issues worsen, I would recommend a visit to the vet to see what may be happening in the nasal canals and eye water ducts!
Best wishes to the both of you!
The answers provided in this discussion are for general guideline purposes only. The information is not intended to diagnose or treat your pet. Seek the advice of your veterinarian or a qualified behaviorist.