Lykos becomes enraged at the deaths of her comrades from the Mud Whale, and she runs up to the bald commander, intending to slash him with her small knife. However Ouni appears out of nowhere to grab said commander from behind and hold his blade to the guy’s throat, drawing a small amount of blood to show that he’s serious. When Chakuro arrives, he and Lykos run off towards the nous together while Ouni keeps the Skylos soldiers in a sort of limbo. That is until the blue-haired commander arrives and shoots Ouni in the leg.
Back at the doors to the chamber, Ginshu, Nibi and one other SDF member are forced to hide as they come under fire from a barrage of Skylos soldiers. Except… where is Nibi??
Outside in the midst of the sand storm, Emma is riding atop her creature and singing another song. This time she appears to be summoning thin, transparent 
hands to… touch the people left on the Mud Whale? Are they meant to escort the souls of the dead to the other side? Heal those who are injured? I didn’t quite understand their importance, so if I missed something feel free to fill me in with a comment.
Meanwhile as he watches Liodari and the Guard Captain fight, Suou also sees the little white hands. He’s holding an injured child in his arms, and the hands cover the child almost completely. Suou also sees a vision of Nelli, and in his mind he sees a slice of Liodari’s past.
We’re treated to a flashback of Liodari as a child in the hospital. He’s unable to keep his emotions under control because, if I understood the scene correctly, the nous wouldn’t accept them. So this poor child, likely slightly psychopathic even by this point, is overwhelmed with emotions he doesn’t understand nor can he control. The adults around him (including some family members) keep him isolated as they don’t know what to do with someone who has emotions as wild and unpredictable as his. Maybe Liodari was already mentally unstable from the time he was a small child, or maybe being kept away from others is what triggered his psychosis. Regardless, this flashback shows that even as a child Liodari was really screwed up.
As Liodari continues to fight the Guard Captain, he’s tripped by Suou, who tells the pink-haired boy that he was able to see his heart. Suou offers to let Liodari stay on the Mud Whale like Lykos, but the Guard Captain doesn’t like this idea and uses the opportunity to kick Liodari across the field. The Guard Captain makes 
a comment about Falaina being “uneasy” and how the boundaries between the nous’ world and the physical world are shifting (thanks to Emma’s song). The Guard Captain uses his thymia to slash Liodari’s torso with a sword, but Suou prevents the captain from killing the kid.
No matter, Liodari soons meets his end as he crawls away and encounters a small group of Mud Whale children, who shoot him with a couple of arrows. Mortally wounded, Liodari falls off the edge of the Mud Whale and into the sand ocean. [ silently cheers ]
Up in their little hiding place, Ouni’s friends are taking cover along with the Skylos soldier they captured. Two twins who seem to be part of their circle of pals appear and criticize Ouni for going along with what Suou directed him to do. Kicha angrily tells Shikon and Shikoku that Ouni participated in the attack of Skylos because he wanted to go, not because Suou asked him to.
The final moments of the episode show Ouni bleeding heavily from the gunshot wound in his leg. He’s kicked around by the bald commander he’d held a sword to moments earlier, but then the blue-haired soldier interferes, calling Ouni a “demon of Falaina”. The blue-haired soldier cuts Ouni’s face with a sword, and tells him that he’ll kill Ouni because of who he is and where he comes from. He hints that there are reasons why the Marked live short lives, but said reason is not revealed in this conversation (although I’m super curious now!).
My thoughts: How horrible. To be killed because your existence has been deemed meaningless? To die because someone in power sees no purpose behind your way of life? It’s all so pointless. What a waste of life.
I really wish that characters were named somehow when they are first introduced into a series. I don’t care if it’s through conversations with other characters or if they just wear a flipping nametag. As a reviewer it is frustrating as all hell to try to find multiple descriptors for characters who have no names. >:/
Going by the preview for the next episode, I’m guessing that Nibi decides to try to help Ouni and will pay for his decision with his life. How sad. ;~; Hopefully I’m wrong but I guess we’ll see next week.