A sentence fragment is an incomplete sentence. Some fragments are incomplete because they lack either a subject or a verb, or both.
This particular sentence lacks a verb. "the marionettes" is the subject of the independent clause. "Operated by wires above the stage" is a participial phrase modifying the subject, i.e. providing some description about the subject; "whose features seemed lifelike" is a dependent clause describing the subject.
As we see, there is <u>no verb to clarify the subject</u>. What does the writer want to say about "the marionettes"? What did they do? or What were they? We have a written fragment, a major writing error.
This is a fragment because the sentence cannot stand on its own. It does not contain a compete thought. The reason it does not contain a compete idea is that it has no verb in it.