Even for this show, this episode is a strange one. It takes a radical left turn in tone as Pino finds herself in a place called "Smile Land" that is inhabited by over the top cartoon characters.
She soon finds herself on a quest to find the creator of the town, Will B. Good. While the setting is drastically different from the rest of the world, the theme of purpose and reason for being do come up again as the aforementioned cartoon characters (who are revealed to be autoreivs themselves) are hoping to figure out what they were made for.
It should come as no surprise that behind the cheery disposition of the town, there lurks a darkness. There are hints to it (more than one character wanting to know what Vincent's weakness is), but it doesn't become apparent until the latter half of the episode. The episode also throws in some red herrings as well. The fact that many characters comment on Pino's genuine smile compared to an artificial one is brought up, but the fact that they're trapped in a sort of fascist illusion never really goes anywhere. The cricket character, who reeked of having a nefarious ulterior motive, just sort of disappears from the story once Pino meets Good.
You may find the big reveal that the episode was a dream of sorts rather vexing, though I think that this episode handled the concept better. It was done for a reason so it doesn't feel like you just wasted your time with the episode.
It gives Pino a chance to shine and she does save the day to an extent. I think the fact that Vincent and Re-L don't appear until the end actually works in the episode's favor as it maintains a sense of mystery as to how Pino ended up where she did.
As we're getting close to the end of the series, you could be vexed by another one and done episode, but as has often been the case, this was a fascinating, engaging, and overall entertaining episode, so I think we can let it slide.