The fact that it is episodic doesn't mean it was handled well. The episodic nature of Trek often left things unresolved because that was the end of the episode. Doesn't mean I believe that Picard just transitioned right back in to life.
The episodic nature of the franchise far too often limited the ability/willingness to continue to explore things that should've been further explored in later episodes. But that doesn't mean the original episode itself handled it poorly at all. It didn't. That episode was perfectly believable and people complaining that it's weird or wrong that he still remembers being a captain or recognizes Riker when he wakes up are just being ridiculous.