Personally, I found this to be a pretty great episode, aside from the obviously Quality derp shit going on as the budget continues to dwindle to nothing.
The majority of the episode shifts to Sophia's perspective after Shun stops Hugo, with Shun's side slowly realizing they're pawns while saying all sorts of cliché shonen shit. Satire gold. It's a really nice touch and a good way of showing the audience that "the heroes" have always been on the wrong side, and the demon lord has been trying to save the world from the elves. The elves have high tech shit, mecha, full control rooms in underground bunkers. I'd start to question that most of them use magic at all aside from Oka. This is very much a case of the advanced civilization sitting on the backs of an otherwise swords & magic world in an Overseer role. If you tie all of this episode into the vision Kumoko had when she hit Taboo Level 10 and realized the world was dying...guess who is still making it worse?
Except this franchise has actual Overseers in the Administrators, who aren't too keen on the shit the elves has been doing. That in turn explains why Gilly-Gilly is one of Ariel's commanders. Fei understands it too, which is why she attempted to surrender and leave, but Shun and she have a pact, and she has to follow his will whether she agrees with it or not. At least she isn't forced like some kind of Command Seal.
Oka's had an entire life of indoctrination, or at least following along because her father made her precious students hostages. The elves are using Oka, to manipulate Shun, to keep themselves safe from Ariel. They will discard Shun and crew the moment the threat is gone.
The episode was a nice way to show that while Hugo was strong, Shun was stronger with the Hero title, while being drastically out of his league in actual world affairs. That's kind of the point all along, no? Normal people and soldiers are nothing, reincarnations are all over the board, and the real power comes from Sophia's level, people who have actually trained for the decade and a half to bring themselves up. And Ariel and Kumoko are in the top heap with Potimas.