The Mandalorian returns to Nevarro and, clearly conflicted, delivers his young bounty to his client. When Mando asks the client what he intends to do with the Child, the client admonishes the Mandalorian for breaking the no-questions-asked protocol guaranteed by the bounty hunter's guild. (Listening to Werner Herzog say anything is always entertaining.) Mando accepts payment (a large cache of beskar steel) and turns over tiny little Baby Yoda.
Mando ventures into the tunnels beneath the city, where his fellow Mandalorians live in hiding, and where he revisits the Mandalorian armorer to remake his beskar into a complete suit. He also quarrels with another Mandalorian over his dealings with these people who have Imperial ties, and has flashbacks to his time as a child, which begin to provide hints of his origins as an orphan of the Empire's violent reign. Mando emerges from the tunnels to make a badass entrance with his newly completed suit of armor.
"The Sin" is the episode where we see that beneath the armor, Mando is a man of conscience, and here that conscience comes into direct conflict with the amoral code of the Guild and their dealings with the remnants of the Empire (whose plans remain unknown). We see Mando involved in an apparent plot much larger than himself, and although he says to Greef Karga (Carl Weathers) that the Empire is "gone," he also acknowledges the New Republic is "a joke." Amid this power vacuum is a chasm of gray where bad things can happen and a reluctant hero can make a difference. How the kid fits into all this is the big question (the client is interested in him for biological or genetic reasons). But it's the small details that make all the emotional difference: The kid's favorite plaything, the metal control-stick ball in the Razor Crest, is the reminder that sends Mando back to rescue the kid and change the course of both of their lives.
Key to this episode is Mando's body language, which has to convey emotional beats with no facial expressions (as when he sees Baby Yoda's carrier in the trash bin). By definition, Mando's helmet always affords him the ultimate poker face, so it's the storytelling itself that allows us to read big things into these small but crucial physical gestures.
We get our requisite action sequences where Mando storms the fortress and takes out the client's stormtroopers through a combination of cunning, brute force, and nifty new weaponry. All of that is expectedly well executed, but then there's an even bigger action sequence where all of Mando's bounty hunter former colleagues ambush him and he has to go up against Karga. Mando gives better than he gets, but he's vastly outnumbered and things start to look pretty insurmountable ... until his fellow Mandalorians emerge from hiding to come to the rescue of one of their own.
"The Sin" is an exciting turning point for the show that puts Mando on the outs with almost everyone else that was previously in his circle as a bounty hunter. Now he, along with the kid, become the hunted. This turn in the show is wisely a direct consequence of the main character's deliberate choices, making him an agent turning this wheel rather than a cog.
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