A Kondo insulator (KI) is a prototypical example of a highly entangled phase of matter, where many-body interactions between local moments and delocalized electrons engender the non-magnetic insulating ground state. Conventionally, the local moments arise from atomic multiplet states with a narrow bandwidth, limiting Kondo coherence to low temperatures. Here, we realize a new paradigm for constructing the KI state with hybridized molecular orbitals in FeSb2. Resonant inelastic X-ray scattering (RIXS) at the Fe L-edge reveals distinct signatures of band-like continuum states and localized states. Comparisons with first-principles calculations establish a mixed-configuration ground state with hybridized Fe d-Sb p molecular orbitals as basis states. By systematically investigating the RIXS momentum, temperature, and doping dependences, we find propagating collective modes commensurate with many-body charge and spin excitations. Our results pave the way for understanding the emerging class of unconventional d electron insulators and engineering high temperature Kondo many-body states.