Xu Xian is dead. He discovered the truth about his wife and he died.
I mean, yeah, he's dead...but he's also unwittingly married to a 1700 year old magical demon snake on a redemption arc, so...you know...something might happen.
Seriously, though, this is a packed episode. There are magical (if not wholly unexpected) resurrections, crustacean armies, Doctor Strange ripoffs, and that's just in the first half.
The creature this time is the suppon no yūrei, and probably a good idea to give up eating turtle altogether.