Not a lot actually happens in this episode. What we do get to see is that Jun is really talking to someone or something when he's off mumbling to himself, and it's not really a split personality thing going on, as whatever he's talking to knows a lot more than Jun could possibly know.
Beyond that, you've just got a lot of bonding between the characters, and even some hidden bonding between the two eldest brothers. Since Ryo is hidden in the bear suit, he can treat Shin the way he really wants to and more like they acted when they were all kids. Again, Jun seems to know what's going on here though.
As for the hostage bit, that wasn't really needed, but rather was there just as a foil to show off Jun's thing.
Not the best of episodes, but not that bad either.
The episode begins with the vice-chief telling Ryo that some random idol would not be able to make it to the city for some public safety awareness event. So, after a quick meeting, Ryo tells them to find someone. He then meets with Eiko, and during that meeting the vice-chief and Itou-san show up to tell Ryo that they've each found a girl: Megumi and Kanaru. Ryo then gets a phone call about a Reverse, leaves them to deal with it and goes off. While this is happening, Shin goes and visits Takoro, and those two, plus Jun have a chat.
Ryo finds out that the Reverse was a hoax, and then sees a guy in a bear suit fall down. He helps him up, and while getting the guy some food, the guy disappears, leaving the bear suit. While hunting for the guy, Ryo sees a couple of kids crying over a lost balloon, so he dons the suit and gives the kids a balloon.
Someone then calls the police station to tell them that they've taken a couple of children hostage, and that the transfer for the ransom should occur at the safety event. At first the vice-chief doesn't want Megumi and Kanaru doing the event, but Itou-san convinces everyone that they should still go ahead with it.
Switch back to Ryo, and after he's given the kids the balloon, a couple of thugs show up, and try to drag the kids away again. After a bit of a fight, one of the thugs pulls out a knife and takes all three of them away.
The event happens, and during it Jun starts talking to himself, and he basically tells Shin and Takaro all about the kidnap plot, and warns them to not let their personas out. After the event, the hostage's dad tells them that the ransom transfer was actually taking place elsewhere. Then the two kids show up, as well as the briefcase of money. The vice-chief then gets a call that the criminals had been dropped off where the reverse call had come from, beaten up by a man in a bear suit.
Cut over to Ryo watching the cart of balloons, and he has a flashback to when Shin was a little kid, and had a balloon which he lost. As he's daydreaming, Shin shows up and asks for a balloon. Then we get a meta-joke and the episode's over.