It's from Invaders From the Deep, a movie compilation of four episodes from Gerry Anderson's Stingray TV show. Anderson made it before creating Thunderbirds, so Stingray has even freakier marionette-people.
Invaders From the Deep was the first episode of MST3K from the KTMA airings. It's one of three episodes never released to the public in any official format or fan recording. The other two missing eps are the second KTMA one (which lampooned another Anderson piece, Revenge of the Mysterons from Mars) and the original pilot, The Green Slime. All three survive in the producer's archives, of course, so they're not lost for good.