I think Squid Ed Wood investigates Squidward's Edward's character in further depth. Mini-Squid Ed is supposed to represent his ambitions, his willingness to take risks in such a dim world. This episode has an unreliable narrator. Mini-Squid Ed, for all intents and purposes, isn't getting the amount of attention Squidward Edward sees. It's just SpongeBob Robert playing with a puppet. But after envying Robert's optimism and success for so long, he begins pinning his own insecurities on him to avoid confronting them himself. His mental breakdown at the end of the episode only rectifies this. Episodes like these are why I consider Squidward Edward to be one of the most complex character ever made.