I love this episode.
Its curious about where Brock goes and why he goes during Ash's match against Misty, when they return to Cerulean City in the episode "The Misty Mermaid" he remembers them though, as if he was there, maybe its only in the dub? or he is refering to seeing them on the video phone or something? Visually it looks like he explains where he is going, ash doesn't seem at all curious either, so i think it was something simple which was dubbed different possibly.
I personally like this episode heaps, the first season of pokemon is hilarious. The art, the voices, the jokes, when misty is trying to avoid going to cerulean city and so on. I think this is a good episode for most of the characters, misty is revealed as a gym leader, which game fans have been waiting for, ash earns his 2nd badge, brock goes someplace, and team rocket manages to successfully steal something, and have some good moments.
here's an idea, maybe Brock goes back to the scene of the crime to flirt with officer jenny or something XP. love the boyfriend teasing too.
In regards to the battle between ash and misty. Firstly ash definitely deserves the badge. Anime battles can be a little bit unclear in earlier episodes, in later episodes such as the orange league, ash recalls one of his pokemon and brings in back out, because it still has HP left, but in episodes such as the pokemon league, his pokemon falls asleep and that is counted as a loss. In the case of this battle, Butterfree loses/faints in a way he couldn't use him again. So i view the match-up between staryu and butterfree as a loss for ash. However, when misty calls staryu back, she could bring it back out, maybe cause she wants to give it a short break, or she thinks starmie fares better againts pidgeotto. Starmie usually flashes when it has fainted, but Misty says "its energy has almost run out" so it is probably in the red zone. Ash does say "okay let's get that trainer badge" or something like that, so that kinda indicates one more hit and he has one. I think there are a lot of things like this which aren't clear cut in the earlier series. Like Misty can't use her water pokemon without being in or near water at the begining, and then they slowly start to use them out of water, like the first instant she uses staryu its at mt. moon and sitting in water, it appears to need to suck it up to use water gun or something, but later they use water gun and seem fine away from water, also in the bye bye butterfree episode she revives her starmie with a water pack, lol.
One more thing, its possible they were thinking that gym leaders aren't suppose to watch other gym leader battle or something? Thats why they might have brock go off, but then again Misty watches the match between brock and ash, only the 2nd time though and in the stands, without really being noticed. okay i've prattled enough, good episode