"Penguin's Umbrella" ties up some loose ends while Zsasz takes Gotham City to Funky Town.
Gotham has mostly told episodic stories each week and those episodes have dropped details or developed characters to build up the seasonal arc. Unfortunately, it's become a bit of a mess to keep track of the alignments and true intentions of the show's fairly large extended cast. A bit disorganized, "Penguin's Umbrella" cleans up a lot of Gotham's convoluted plotlines.
It helps that "Penguin's Umbrella" is a pretty good episode overall. You may not remember all the details motivating the characters, but does that really matter when there's a shootout in a police station? You may not be sure what Penguin is up to all the time, but it's hard to not laugh when his "Honk honk" joke doesn't quite land with mob boss Maroni. And while Victor Zsasz isn't quite the character from the comics, he's over-the-top enough to grab your attention.
The episode does lean too heavily on dialogue at times. Characters explain what's happening instead of letting the audience figure things out for themselves, but that may be unavoidable when a show gets as complex as Gotham has. Hopefully after this week the it won't get caught up in itself too much.
It is Gotham though, so there are still plenty of just bad moments in the episode. Professional killers that - for some reason - can't search a parking lot, continuity issues in characterization, and dialogue so cheesy you may not even flinch when someone says "ancient Indian burial ground" unironically. At this point, stuff like this is standard issue with Gotham. Acknowledge it, wince, and move on.
And once you move on, you get decent action, tense moments, and great jokes that make "Penguin's Umbrella" a fun episode. Almost every character and story has shifted course, but this is still Gotham City. The status quo has been maintained, but now most everyone has new motivations and goals to keep an eye on.