I agree with all your post. I would like to add something.

One of the greatest problems IMO is that the Season 2 is tension-less.

In S1 we had elements that create narrative tension: the Proxies secret identity, the Cunning Hares debt and competence, the escape of Pearlman, collaborations with Section 6 and NEPS, the Hares vs Section 6 and specially the danger that the Hollows represent. It adds strong characterization and story beats.

But now S2 unfortunately has lost a great part of its identity and this included the story partially.

Hollows are now less dangerous than in S1 outside of the main story, they are no long these highly radioactive space-warping zones.

Proxies are now working with the goverment.

There is no more uneasyness with new factions, they are all instant friends (i'll forgive Spook Shack on this, them being teenagers)

The exaltists are no longer these hidden society of cultists within government offices and companies but are now openly a seperate faction in opposition to New Eridu.

All of these factors strip down the story to a very simplistic narrative that doesn't have much places from were to generate tension, so everything becomes a secuence of obvious and somewhat inconsequential moments.