Falcone: See, in a rather cumbersome flashback, we learn that Penguin has remained loyal to Falcone this entire time. That's the reason he's remained calm - Penguin told Falcone about Mooney's plans to take over and her lover Nikolai, and who knows what else. On top of that, he's moving up the ranks of Maroni's operation, giving Falcone more power.
Penguin and Falcone's alliance is also the reason so many things that have felt odd: for instance ordering Gordon to kill Penguin or letting Gordon go in this episode. What Penguin has planned for Gordon is still a mystery, though.
Zsasz: We need to talk about Zsasz. The comics character made murder his life, liberating "zombies" of their lives, with a preference for a knife. Gotham's Zsasz is a gun-toting professional killer or possibly just a force of nature that Falcone hires to pull Gordon out of the police station.
Still, even as a departure from the character in the source material, this Zsasz is fun to watch. His shifting volume and tone reminded me of Andrew Scott's Moriarty in the BBC Sherlock series. (His "Funky Town" ringtone might have contributed to that comparison.) And he still carves hash marks into his skin after killing and all, but he's just not quite the Zsasz we know.
At one point, he orders the police department to empty out so he can take Gordon to Falcone, and this might be my favorite moment in the series so far. Not only does it add to how frightening this character can be, but it also shows how alone Gordon really is at this point. Further, we see that Captain Essen isn't entirely terrible: she doesn't leave until Gordon tells her to do so. The whole scene is pretty great, and the resolution to the shootout (in the parking lot) got a cheer from me. These scenes make this episode worth watching.
Bottom line: A lot of stuff happens in this episode, and it's a little confusing but still fun to watch. Hopefully Gotham can keep things a little more straightforward now that the air has been cleared regarding the Cobblepot murder.
Recommendation: If you are into the show, this is a must watch. If you dropped the show before, this might be the episode to get back in on.