VILLAIN!: Oops! Looks like lovable ol' Xellos once done a genocide. That goof! All water under the bridge now, right Milgasia?
I find the exposition here to be less repeating what the characters already know and more clarifying some details Lina may have been suspicious of, but not totally clear on. Back when she fought Shabracadabra she referred to the power behind the Giga Slave as 'a more powerful dark lord', and while Sylphiel's warnings that casting it could destroy everything did stay her hand in using it until now she was thinking of the Giga Slave more with caution than fear. The Claire Bible, however, spells out the truth that the Lord of Nightmares is more than just a really powerful monster, it's the mother of all of them (and possibly, all things?) and evidently wants nothing more than to return everything to nothing.
So I guess instead of just rolling a natural 20 using it when fighting Shabby, it was actually a roll at disadvantage and Lina had the miraculous luck to roll double twenties.
Martina doesn't really accomplish much inside the blurry photoshop space but be a nuisence. I had this memory of her contributing... I dunno, SOMETHING inside of there, but nope. Martina's gonna Martina.
Oh and Gaav... might not be a bad guy? At least as far as the world at large is concerned, anyway. He certainly wants to kill our heroes, so he's still the villain, but he's more or less just an obscenely powerful human now instead of a monster so he no longer has that appetite for blind destruction. So instead of causing devestation because he needs to, he only does it when he WANTS to. So... still a bit of a bad guy I guess.
Oh, and Xellos helps defeat Saygram when Lina hits him with a perfected Ragna Blade, but then is rather shockingly one-shotted by Gaav. This is like those moments in DBZ where Piccolo or Vegeta get casually one-shot by the big bad to build them up as a big threat. This is a bit more effective, though, because while Piccolo and Vegeta get one-shot like that so often it's kind of a meme, this is the first of very very few instances where Xellos gets got like that.
UNSTOPPABLE: Hope everyone didn't get too attached to Gaav as the big bad. But I'm getting ahead of myself.
Lina wants to use the Ragna Blade on Gaav, but it turns out even while perfected it empties her MP pool and also eats into her HP, so she needs Milgasia to restore her while the rest of the party fends off the ferocious demi-god until she can use it again.
It, uh, it doesn't go super great.
Pretty much everyone in the party gets wrecked in this fight as it's clear they're all punching well above their weight. But eventually Lina is back in the game and lands a hit on Gaav with the Ragna Blade.
It, uh, it doesn't go super great.
Gaav resists it long enough to break Lina's arms in the process and while she does finish the strike, he apparently just shrugs it off, so Gourry is forced to come up with the first good idea he's ever had in his entire life: RUN AWAY.
Discretion is the better part of valor, after all.
But shocker, the unnamed street rat that has been tagging along for the past few episodes is actually Hellmaster Phibrizzo! He Thanos-snaps Gaav out of existence (who has a rather blood-curdling scream as it happens, yeeesh). Phibrizzle is basically another DBZ trope of an even stronger bad guy swatting aside the other bad guy the party was having so much trouble with.
So his big plan all along was to try and force Lina into a no-win situation against Gaav so she'll use the Giga Slave and hopefully destroy the world. But since Gaav couldn't deliver he forces her hand a different way, by kidnapping the lovable blonde doofus and inviting the party back to Sairaag.
Next is still my favorite season, though the first was quite a bit better than my recollection of it on the re-watch. Next does suffer a bit since the truly big plot moments are all crammed in the last, like, six episodes, but to anyone who hasn't seen it yet: We're in for a ride in the last four.