This post contains spoilers from Wednesday season 2 episode 8 from this point forward.
Jumping off from the penultimate episode of Wednesday season 2, which found Pugsley missing at the hands of the monster he regenerated, the season finale opens with a search party in the woods to find him. Sheriff Santiago asks Morticia and Gomez if someone who wants revenge against the family could be behind this. There's definitely more to the story that the couple aren't sharing about their past relationship with Isaac and Francoise.
Wednesday and Morticia consult with Weems about what to do about finding Puglsey, and she suggests turning to Grandmama to strengthen their collective powers. The power of three, we learned that from Charmed. When they join hands and Morticia recites a spell, Wednesday's powers suddenly return. She has a vision of her parents in the past, in the woods at night burying a body under the Skull Tree. Obviously, it's Issac's body that they're burying.
Morticia confirms it's the truth and divulges the full story. During Isaac's accident at Iago Tower, Morticia and Gomez were at his laboratory. Isaac called on Gomez's electricity to power the machine that would help Francoise. But Isaac had plans to sacrifice Gomez for Francoise, even digging a grave for his "best friend." Morticia intervened, exploding the machine and killing Isaac. Francoise survived, and Gomez lost his outcast abilities.

Thing's shocking origin story involves Isaac Night
Morticia and Gomez covered up Isaac's death out of fear of retaliation from Stonehurst. Naturally, Wednesday wants to help find Pugsley and save the day, but Morticia wants her and Thing to stay with Grandmama while they clean up their past sins. She denies that option outright. Meanwhile, the Nights begin their plan with Pugsley, which includes Tyler creating fake Hyde tracks far away along with Puglsey's costume before calling in an anonymous tip for the cops.
While working with his bees and honey, Eugene gets a visit from Isaac with a box for Wednesday. Inside, there's a creepy crystal ball of the Skull Tree with the word "midnight" written in red on the bottom. Wednesday arrives at the tree at the designated time with a crossbow and Thing in tow. She meets with Isaac, who has Puglsey tied up, while Thing attempts to shoot Isaac. He blocks the shot and Tyler locks Thing in a plastic box. Shocker: Thing is Isaac's hand!
Morticia cut off Isaac's hand, but the power surge animated the severed hand and became Thing. In an instant, Thing is sewn back onto Isaac's arm and used against Wednesday. He holds her into the air and throws her into the Skull Tree grave, closing it with the vines. Luckily, Agnes witness the whole encounter. She breaks Enid out of the lupin cages to save Wednesday.
Together, they dig Wednesday out of the grave. Under the full moon, Enid decides to turn into a werewolf to use her strength on Wednesday, even if it means staying a werewolf forever. Wednesday's freed and Agnes tracks Enid after she runs off. Wednesday's reunited with her parents, and time is officially ticking to save Pugsley and stop Isaac.

Does Puglsey die in Wednesday season 2? No, but...
Back in Iago Tower, Isaac puts machine back together as Wednesday reads Morticia and Gomez the riot act about withholding Thing's truth from him. While Gomez stays back to call the police, Wednesday and Morticia brave the tower to stop Isaac. He's seemingly losing energy and strength as Tyler locks up Pugsley in the chair that will use his powers to run the machine. Next, Isaac ties Tyler up to the table. Francoise decided it's too late for her. She wants to save her son.
Just as the machine begins, Wednesday and Morticia arrive. Instead of killing Tyler, she uses an axe to break him free from the table. She removes Puglsey from the chair draining his powers. Tyler turns into his Hyde and throws Isaac and Francoise, who turns into her Hyde. The Hydes fight as the Addamses break the malfunctioning machine that again causes an explosion. Francoise falls to her death as Pugsley, Gomez, and Wednesday save Morticia... but Isaac chokes Wednesday.
Morticia appeals to Thing, who seemingly points to the axe on the ground. After Morticia kicks it over to Wednesday, she throws it at the machine, ending Isaac's control over him. Thing regains control of himself and attacks Isaac before removing his mechanical heart and killing him. Thing breaks free from Isaac and rejoins the Addams family. But there's still Enid to worry about and Tyler, who's approached by Capri to join a pack of Hydes. She's a Hyde-werewolf hybrid.
Morticia gives Wednesday her sister's journal, which brings Wednesday closer to Aunt Ophelia. Repairing their mother-daughter relationship allows for Weems to leave as Wednesday's spirit guide. Instead of going home, Wednesday teams with Uncle Fester to hid the road in search of Enid. She still questions her parents and their intentions. While looking through Aunt Ophelia's journal, Wednesday has a sudden vision of Aunt Ophelia, a blonde woman kept in the basement of Grandmama's home. When she opens the door, Ophelia is writing "Wednesday must die" on the wall.
Notes from Nevermore:
- As Enid tearfully watched Bruno sending off Sofia, she finds Ajax has forgiven her and wants to be friends again. Agnes offers to help her find a new boyfriend, but she decides to take a break from romance.
- Pugsley now has a friend in Eugene after being pushed away from him at the beginning of the season.
- While Capri seems to be recruiting Tyler to join her group (who knows if that's nefarious or a "support group" as she called it), Enid's still out there on the loose. Between Tyler, Enid, and Aunt Ophelia, Wednesday will be quite busy in Wednesday season 3!