No sooner does Shinpei loop back to the kitchen does Ushio arrive with Mio to fill him in on what happened: the enemy got to Nezu and used his own sniper rifle to kill Shinpei. We also learn that the creepy vision Shin keeps having is a visualization of his situation.
The past is crumbling behind him, and should he loop back where there is no more solid ground, he’ll fall into nothingness. He figures he has one loop left, if that. If they’re going to make their stand against the Shadows, it’s now or never.
Shinpei’s plan involves using himself as bait, since Haine wants to kill him until he’s out of loops and no longer a threat to her plans. The part of Mio’s personality Shadow Mio copied can’t help but admire how cool her big brother is by doing this, but forgets that Ushio can transform into a watch.
Ushio transforms and runs with Shin in her arms as an angered Mio gives chase. The real Mio, Sou, and Tokiko block her path, with Tokiko using two Shadow Babies Ushio freed from Haine’s control for defense and offense. Hizuru gives herself over to Ryuunosuke, who takes on “Shiori’s” corrupted family and friends.
When Haine and Shide get involved in chasing after Ushio and Shinpei, Ryuunosuke takes a bullet for them, buying them enough time to regroup in the gymnasium. Back outside, Shadow Mio shows off just how graceful and diabolical she can be by merging her body into one of the babies, but ends up getting burnt by her original and shot with nails by Sou.
Back in the gym, Ushio narrowly avoids getting shot to shreds by Shide and his trusty revolver, taking the stage as Tetsu switches on the stage lights to keep Haine and Shide’s attention on her. Haine and Shide, always convinced they have the advantage, are sorely mistaken in this case.
Still floating just over them are Ushio’s hairs, which are transformed into six masses of gasoline that then fall and soak the two. Then Shinpei, who was lurking on he balcony above them, tosses a match that starts a conflagration, then brandishes a revolver of his own. It’s a very cool action movie scene.
Hell, everything in this episode is incredibly cool and cinematic. A great deal of time and effort went into the animation; clearly STR was holding a large chunk of its budget for this episode (and probably a couple of future ones). While some suspension of disbelief normal “civvies” in Shin’s group survive as long as they do, great care is taken to ensure the weaker (Shinpei, Tetsu, Sou, and Mio) are protected by the stronger (Ushio, Tokiko, Nezu and Hizuru).
Thanks to their preparation, coordination, and vast amounts of misdirection, along with exploiting the arrogance of the enemy, Ushio is on the cusp of deleting Haine…only for Haine to use Shiori’s face, voice, and tears as a psychological weapon that cause Ushio to hesitate for just a moment. In that moment, Shide, who was playing dead in the fire, shoots Shinpei in the chest several times, then grabs Ushio and pulls her into the flames.
Shide intentionally missed Shin’s vitals so that Ushio would die before he did, and all the information on the previous loops will die with her. But once again Ushio pulls a fast one on him, as the body he grabbed was just a dummy. The real Ushio, in shell pendant form, reforms into a human and stabs Shide through the heart, promising to delete him.
Shide is only saved by Haine pulling off the most impressive Shadow stunt to date: deleting all of the air in the gym, killing the fire, causing Shinpei and Tetsu to nearly asphyxiate, and blowing out all of the gym’s windows from the air outside, allowing Haine and Shide to escape.
When Ushio collapses, a distraught Shinpei rushes to her side, but she’s fine; she’s only exhausted from all the copying she did. Like Haine and Shide, Ushio laments that Shinpei has been mortally wounded by the gunshots and doesn’t have much time left, but he reveals that a homemade bulletproof vest under his shirt protected him.
At the sight of the vest and upon realizing her Shin is okay, Ushio pulls him into what must surely be a very painful (due to the bullet impacts) but also very welcome hug. It’s an incredibly sweet and moving hug, the reward for going through a literal trial-by-fire.
While Haine and Shide are still out there and sure to regain their strength soon, it’s about as good an outcome as you could ask for. None of Shinpei’s friends or family were killed, and they’ve even captured Mio, whom the real Mio says Ushio should hack so she can become one of them.
Along with Toki’s Shadow Babies, Ushio’s hacking looks to be the potentially decisive key to victory: being able to turn enough of Haine’s minions to their side so they can fight on more even terms. The only problem is time.