I know many people find Subaru to be a terrible character, and in particular they find him to be extremely cringe inducing.
Fair enough. For people who are watching Anime to escape reality, a main character who is suffering from extreme depression and is growing steadily more broken by the episode probably isn't all that much fun to watch.
But for people who understand depression--who have lived with it, and who have experienced the agony of soul crushing depression--Subaru's character makes sense. We cringe when he's making mistakes, but we understand, and sympathize. We've made mistakes, ourselves. Sometimes horrible mistakes, that we wish with all our being we could take back. But we can't.
Depression changes how you think, and it makes things that seem obvious to healthy people seem anything but to you. You focus inwards. You don't know what to do. You don't know how to connect; you don't know how to reach out and ask for help; you think you're the only one who can find a way forward, while at the same time thinking that nothing you do will be good enough, so you struggle, you flail, and you fail. You make things worse. And you want it all to end--you want to die, but in Subaru's case he can't even do that (he'll just reset, again).
So when I look at Subaru's character, everything he does makes sense. It often isn't what I would have done, but I have no problem recognizing that it's something he would have done, that it's something that fits his character.
And this episode is where he finally, truly, breaks.
But it's also where he finally, truly, heals.
Subaru may not always be likable--he may even be easy to hate, at times--but he is the realest character I have ever seen in Anime.