I still maintain that this episode (as dark as it is) isn't as frightening as City of Walls and Secrets. My reasoning is that (even though it's obviously exaggerated for the sake of effect by the show) the Orwellian nightmare of City of Walls in Secrets is something that (sometimes) can happens in real life. Whereas this episode isn't.
That having been established, if have a kid (or are a kid) I wouldn't recommend this episode unless you (and your hypothetical kid both) can easily handle supernatural horror stories (which, full disclosure, are not my cup of tea.) With that out of the way, there are good things about the episode
1) The new villain of the episode
2) The episode's climax and how it builds upon prior revelations about Waterbending
3) The fact that Sokka's intuition usually come from a place of reason (to avoid spoilers, I'll say no more on that.)
4) The fact that Sokka still remembers Princess Yue fondly
Flaws
1) This episode might be too scary for the show's main demographic
2) Relying on direct power scaling to solve a conflict seems to me to be lazy writing (to avoid spoilers, I'll give no more detail.
If you're a horror enthusiast then you'll love this episode. If your tastes are similar to mine then you'll probably like this episode but not love it.