I thought this was a step up from Episode 2. At least it felt like a real episode of a TV show (not a morass of nothing) and didn't have any morally-repugnant "torture works" message.
That said, the show is floundering. It seems like it went through hella edits in the writer's room which made it nigh-incomprehensible, or else they originally intended for a longer-run series and it was cut back to the bone, with needed linking scenes gone.
As others have noted, character motivations make little sense here. Why is Renslayer so opposed to working with Loki and Moebius? She says that Loki killed He Who Remains with Sylvie, but we know that's false, and I don't know how she would have heard this rumor anyway, given she's been off on her own. Why has Sylvie pivoted from wanting to be left alone to killing this Kang variant? Why does Miss Minutes want to fuck He Who Remains? Why has Loki transformed into a joyless defender of the TVA, with no edge left at all? Why can't anyone just sit down and have a real conversation where they listen to one another?
This is typical serialized wheel-spinning. There's not enough meat on the bones of the season, so they're filling in a movie-length story with worthless padding which isn't telling us anything narratively interesting about the themes of season 1 (like the issue of free will). Yet at the same time, it feels like there's notable gaps in the narrative between each episode, as if linking vignettes were cut entirely. So it's both too long and too short.
Maybe it's going to close well, but I expect next week will be more of the same slow-paced, wheel-spinning dreck. It's a shame to see it fell so far, but they both swapped writers and directors, so it's not surprising it feels like a completely different show.