They Wasted a Perfectly Good Character: In Episode 49 Connoleth mentions the existence of Demon General X, someone who guards Velverosa's throne while she is absent. Being trusted with such a job would imply that at the very least X is more powerful than Melathia. They never appear, or even get a mention afterwards.
They Wasted a Perfectly Good Plot: A large portion of Episode 161 (Season 3, Episode 33) is spent showcasing the characters building bonds and learning new skills. None of this returns at all later down the line.