It was a rarity in the original series, but a few other half demons were featured in story arcs. Shiori was one of them, appearing way back in episodes 73 and 74 of the first series as a little child. It was actually one of the few elements in this sequel that caught me off guard since it was over 18 years ago when the story first aired. I believe this is the definition of a 'deep cut'.I thought that this episode was pretty good. It was interesting to learn about Setsuna's backstory, especially when we already knew where Towa and Moroha were raised. Sesshomaru isn't going to win father of the year awards, but he did care enough about protecting Setsuna by making sure she arrived at the half demon village and kind of sent instructions so she could learn to fight. It's still pretty distant, but he does care about his children at least a bit.
I also didn't think that half demon children was that common in this franchise for some reason. I thought that cases like Inuyasha were a rarity, but it could have become more common over time or it was a misunderstanding on my part due to my limited knowledge of the original series. Given how Setsuna was already pretty used to fighting to protect her life in the village, it wasn't a surprise that she didn't take to living with humans and wanted to go back to her home.
I actually thought that the demons did end up eating some of the children at the village or that Setsuna injured someone when her full demon powers took over, but I think that would have been brought up a lot sooner, especially if Setsuna had a personal enemy to get revenge over. It did explain how Miroku already knew about Setsuna, sealed her demon blood and how she got her weapon. Since the village is more of a safe haven to protect half demon children, it made sense that Setsuna would eventually have to leave since she was more than strong enough to protect herself.
While it would have been nice for Moroha to hear about Setsuna's past, I can see why she wasn't included. This would be more impactful for Towa since she didn't know where her sister was for most of her life. It's also a good way to show how much Setsuna trusts and cares about Towa when she's willing to be more open and emotionally vulnerable. It was also nice to see that Setsuna does still come out to help the village against demon attacks every now and then. Overall, it was a pretty good episode.