I actually may be in the minority here, but I loved this episode and actually appreciate that Ash lost, because it gives Ash and Torrecat the motivation to get stronger. And also to be fair, if we look at past episodes of Ash's first stage Pokémon facing the third stage Pokémon, the pokémon and/or its trainer were jerks. When Tepig faced Emboar in Black and White, Shamus had been a complete jerk, having abandoning Tepig, that trainer needed to be knocked down a peg by Pignite. And in the XY series, during the episode Fletchling evolved, when Ash tried to challenge its trainer, Talonflame was a jerk in brushing it off thinking that it would be too weak to battle it, and only accepted a battle when Fletchling saved it, thus Talonflame needed to be knocked down a peg by a newly evolved Fletchender. In these two cases there was the so-called plot armor. In the case of Sun and Moon, neither Masked Royal/Professor Kukui nor Incineroar were jerks, so they didn't need to be knocked down a peg, thus getting rid of that so-called plot armor. This allowed Ash to get stronger, without actually winning, giving them a chance to get even stronger, and possibly even have Torrecat evolve even further.
Also loved the new evolution animation for Litten. I did not see that coming. And I was wrong about Masked Royal hiding his Z Ring under his wristband. And I'm glad Ash wasn't the only one who lost at the battle royal and they had Kiawe and Sophecles lose first. Though I don't understand Japanese, I think the Masked Royal made an exception to the rule that once a side is knocked out the battle ends immediately. Also, I loved Team Rocket's involvement in the episode, acting as the announcers, and I found it funny how they actually blurted out "Twerp!" after seeing Ash.