Having read some dull comments regarding the White Whale arc's substance, I felt compelled to throw my 2 cents in.

Admittedly lacking in the thriller/character study departments of EP13-18, or the mystery aspect of Arc 2, this part's significance is still sold short.

A THREAD.
There are many angles one could approach this arc with.

I'll look at it from the perspective of its importance to Subaru's character, & then the meaning of the Whale itself. I won't focus much on Wilhelm & how it acts as a framework to his story, as he deserves his own thread.
The obvious takeaway of those episodes, & their most common defense, is them showcasing Subaru’s development. After coming to the realization of his character flaws & how he isn’t in some isekai fantasy, Subaru is given the push he needed, starting his journey to better himself —
— and become a hero worthy of Rem's words. Each lesson learned from the candidates is put to use, most notably the art of negotiation, and the impossible alliance is forged.

But what’s more interesting is that, in an arc where he acts as a hero... the focus isn’t even on Subaru.
His resolve is tested at times, but the real focus lies in the personal struggle of Wilhelm, the significance of the Whale to the world & Crusch’s ambitions. The audience discovers those along with Subaru, after his self-centered self is no more. Our world is suddenly widened.
It marks a shift from a deeply personal character study of Subaru to a more grand narrative, the change in storytelling mirroring that of his mindset as we actually see more and more of the other characters. Subaru being a hero ironically means he no longer has the spotlight.
(Seeing Rem's fleshed out arc & backstory was an exception, because her arc overlapped & paralleled his in many ways—and she’s the only person Subaru opened up to at that point. In a tale told from his perspective, of course such a figure would get focus.) https://twitter.com/Jaereku/status/1288628277251387394?s=20
This turning point in the anime's narrative style comes with interesting new characters & strong climaxes. I'm thinking of Wilhelm, though I'll focus on other aspects of the arc on this thread (the quality of his character in these episodes acknowledged by many already)
That said, he's undeniably one of the biggest strengths of the arc, and I talked about his character in these episodes a little before:

https://twitter.com/Jaereku/status/1287373312344162305 https://twitter.com/Jaereku/status/1291108699684184064?s=20
But why a white whale, over many other animals/mabeasts?

Whales are used to convey emotions, ideas and themes that are large and compelling… like Wilhelm's obsession with revenge. Wilhelm, normally seen calm and mature, is overcome by rage at the mere thought of the creature.
The scale of the beast fits the grand scale of the arc and the stakes for the characters involved.

But what strikes me most is Nagatsuki's use of the color white for his most terrifying beasts — the White Whale, Puck, and more recently, the Rabbits.
When one wants to convey horror, red and black are the go-to colors that humans are naturally wary of. So why white?

White is purity. But white also implies emptiness and the void. It has an inherent dread attached to it, explored in the novel Moby Dick:
It's only fitting that a Whale which [erases] existences would be color-coded with a funereal white, the absence of color, its colossal and oppressive nature adding an almost Lovecraftian dimension to it.
Needless to say, Tappei's love of classic Western literature is most prominent in this arc (& later on too with detective Poirot, for Arc 6 readers). Everyone caught on to the White Whale being a retelling of Moby Dick with Wilhelm taking the center stage as another Captain Ahab.
The flashy nature of the battle caused many to overlook the amount of thought put into it by the author—which is no surprise, as the directing is never boring. The state of the battlefield mirroring the hope or despair of the fighters with the use of lighting is just one example.
Plenty of character moments like Wilhelm giving up, accepting to be consumed by the Whale (the personification of his obsession & unwillingness to let go) to join his wife (the flower), only to deny such a fate in the end and re-emerge, make this arc and its cast a memorable one.
Anyway, I just wanted to share my (messy) thoughts on this arc which is regarded as the black sheep of S1, for some reason.

I'm referring to it as the Whale arc, but of course it's more like just a part of the more grand Arc 3 narrative.
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