Last week's episode told us everything to try and tell last week's episode's story, which caused it to play out in isolation. It rang false, because it did not match what came before or in this episode, and the "information" existed to allow that episode function in the very cliched way it did. If I had to guess, it will have very little bearing on the character of the Mando going forward. Like a lot of good shows that have bad episodes where characters don't act like themselves and it doesn't end up jiving with the overall story or character.
I disagree we saw him progress with Gizmo last week. The Mando looking at Gizmo from distance while someone spouts exposition is not progression. This week we learned he has crappy parenting skills, while at the same time accepting the intervention of someone else who cares, as long as he finds their intentions good. He went from, "where is the kid" to becoming friendly with not Ripley, and he rewarded her in the end.
We also saw how he handled the bounty situation, which was again different from how he handled similar situations in the first three episodes. He read the kid right away, but also knew he needed the money. Little scenes like going to get the dewback said something. Where he probably would have put up a fight in a different situation, he instead just went with it. Which is interesting, considering how he handled the Jawas.