Three short lines give us a whole scene: a night train, a long carriage, and far away from the speaker, a hat that looks sad. We never see the person wearing it. The speaker notices only the hat, and that tells us how much distance there is, both in the physical length of the coach and in the lack of any connection between strangers.
The word "sad" is the interesting part. A hat can't feel anything, so the sadness must be something the speaker reads into it, perhaps from the way it sits, or from the slumped shape of the person beneath it. The poem suggests the speaker may be projecting their own mood onto a stranger, or at least recognizing it there. The title, "Distancing," hints at this: the speaker keeps a safe space between themselves and the feeling, observing it from afar rather than approaching.
The mood is quiet, lonely, and a little dim, the sort of stillness that settles over a late-night journey when everyone keeps to themselves.