Really good episode. I'm a sucker for these kind of AU's and it reminded me of the Epitahs episodes for Dollhouse. I agree though that it seems late to develop this storyline. It doesn't bother me that everything wasn't resolved at the end but it did annoy me that it won't be followed up next week. Likely.
Another stellar performance by John Noble and seeing him as the old Walter with Astrid and Peter should be interesting. The age make-up on Broyles was good and Belly's "return" was cleverly worked in.