I don't think the plot as it unfolds now works without Episode 3.
A lot in this episode and possibly the series resolution appears to hinge on the Loki on Loki romance, which created that "have-you-ever-seen-a-branch-like-this", got them out of Lamentis eventually and in Mobius' words may be the thing to bring the TVA / sacred timeline down.
And by Episode 2, Lady Loki was nothing but a "last-5-seconds-of-the-episode-cliffhanger-face-reveal"
For the entire thing to work, somewhere between Episode 2 and Episode 4, you need introduce to Sylvie-Loki more properly and establish the Loki-on-Loki-relationship up to and including the potential for romance.
Having the two of them go through an abbreviated 30 minute Buddy-Cop/RomCom hybrid, hating each other but needing to work together, starting to gel with one another and finally have a short Rogue One Style "let's share our feelings in the face of Apocalypse" moment did the job well IMO.
Sure, it used plenty of worn tropes to do it and maybe could've been directed sharper in some scenes, but if one were to really skip Episode 2 to Episode 4, the idea of Loki-has-a-crush-on-Loki being the key to toppling the TVA just doesn't work.