"I wanted to watch a Gundam, and Gundam has started" is the only explanation for Episode 2 of Mobile Suit Gundam GquuuuuuX.
Memories of the original UC timeline resurfaced with the second episode of Mobile Suit Gundam GQuuuuuuX. Long-time fans of the franchise would have been excited when the episode started with the Red Comet himself, Char Aznable, taking centre stage. Those who have watched the second episode will understand the meaning behind “I wanted to watch a Gundam, and Gundam has started.” but for those who didn't understand, stick around for a nostalgic yet surreal journey to the year U.C. 0079 of Mobile Suit Gundam GQuuuuuuX, right in the middle of the One Year War. With that said…
Warning: Major spoilers ahead!
The episode opened with three Zakus approaching Side 7. One of these Zakus was coloured red and had a commander antenna on it, signalling that the machine was the commander of the operation. While trying to open the gate, the red Zaku pilot commanded one of the pilots, Slender, to stay back while commanding the other to maintain his distance when jumping down. After scouting briefly and confirming that the place was indeed the base of Operation V, the red Zaku pilot, Char Aznable, gave the command to destroy every military part in the colony. Denim reminded the commander that this was a reconnaissance mission, but Char wanted the glory for themselves.
The arrival of the Red Comet

The scene then cut to Char's right-hand man and captain of the ship, Dren, back in his Musai-class Battleship. One of the ship's crew asked Dren why the lieutenant commander went into Side 7 himself. The captain said that it was either Char's intuition itself, or because the commander is still young. Back in Side 7, Char's forces were destroying every military part they saw. Denim then noticed that there was another machine lying around and prepared to ransack it, but was stopped by Char. The Red Comet then asked his partner to cover for him while he advanced to the machine. The machine was a Mobile Suit with the codename RX-78-2 Gundam, a name that sounds vulgar to Char himself.
Char, however, was amazed by the machine energy gain, which was at least five times that of a normal mobile suit. While Char was trying to analyse the suit and try to activate it, Denim was getting outshot by the Earth Federation Forces' another mobile suit, the RX-77-2 Guncannon. Char told Denim to stay back and let him handle it after he successfully activated the Gundam. He proceeded to shoot the Guncannon using Gundam's head vulcan, but ran out of bullets before successfully hitting the target.

Earth Federation Forces (EFF) lead scientist for Operation V, Tem Ray, didn't believe what he saw when his creation attacked its supposed teammates and questioned who was inside the cockpit. Char, noticing the suit still has a melee weapon, immediately used the Beam Saber to make quick work of the Guncannon by destroying the cockpit, marking the anti-climactic end to the first mobile suit war. Char then proceeded to the docking bay and found the White Base, also known as Trojan Horse or The Rocking Horse, alongside its crew on the deck. He said to the crew that they didn't have much luck meeting with him, then killed everyone inside with his Beam Saber, hijacking the ship. While contemplating his much better luck, he remembered a moment of inspiration that changed everything for him.
Char brought back the Gundam and the White Base to his Musai battleship. Zeon's crew quickly moved inside the White Base, refuelled the Gundam, and replenished the mobile suit's ammunition. Dren then noticed an Earth Federation's Salamis-class light cruiser with two mobile suits coming to their position. Char said that it was strange for Wakkein, the supposed captain of the cruiser, to act this quickly and thought he might be getting impatient. He commanded the Musai to face the Salamis while ordering Denim and Slender to escort the White Base. Char said that he would face the two mobile suits himself.
The Earth Federation nightmare that is Char's Gundam

Char then sortied from the White Base with the Gundam and quickly destroyed the Zaku that the Earth Federation had stolen for their practice target with a single Beam Shot, showcasing the sheer power of the machine. He then faced the 01 Gundam, which fired two missiles at him. Char shielded the explosion from one and then shot the other with his Beam Rifle. The 01 unit continued firing its Bazooka, but Char dodged all of its shots this time. However, his true target was the White Base, and Char noticed it. He quickly shot all three of them while maintaining the 01 unit's distance with his Head Vulcan. The Red Comet took the battle to close range and quickly kicked his opponent before finishing it with a quick double slash using his Twin Beam Saber. After the battle, he said that the Gundam might be the key to his future strategy.
The scene then moved forward to Solomon, some time after the success of Zeon's raid on Side 7. Char was informed that Kycilia Zabi approved his idea of reverse-engineering the Gundam to mass-produce it and told Zeonic, Zeon's mechanical developer, to halt the development of new mobile suits. The Gundam, however, would still be in Char's possession and had been repainted to his signature red colour.
Char then joined the Zeon stronghold, Granada, in Luna or Moon, headed by Kycilia Zabi. Professor Flanagan then informed Char that he was one of the Newtypes, a special human who had reached a new stage of human evolution. However, he noticed that this should be reported to Kycilia and not to him. Char asked Flanagan what he wanted from him, to which the professor only said that he just wanted to witness humanity's progression. Char then continued by asking if there was anyone else who was also a Newtype.

After his talk with Flanagan, Char met Lieutenant Chalia Bull, who can be assumed to be the other Newtype. Chalia Bull reported Dozle Zabi's death in Solomon five days ago, meaning it was already some time after Char left the outpost. The Earth Federation Forces have advanced quickly after Solomon's fall, and Chalia feel that a decisive battle on Zeon's homeland couldn' be avoided. While the situation was dire, Char said there is still a way for Zeon to win: the Gundam that has been improved with a new interface, the Alpha Psycommu.
Char then recruited Chalia as his partner so that the lieutenant didn't need to be torn by the politics between Kycilia and Gihren Zabi, the supreme commander of Zeon. Char said that for the future of humanity, they need to win the war. However, when Chalia asked what comes after they won the war, Char said that it was rude to peek inside one's heart too much. He also remarked that they both couldn't keep a secret, signalling that a Newtype has some kind of connection to another.
The battle of Granada and Zeknova
The story then proceeded to the battle of Granada, where the new Gundam finally showed its capabilities when improved by the Alpha Psycommu. The Red Comet single-handedly destroyed multiple Earth Federation battleships and mobile suits using the Gundam. However, Zeon's main forces were focused on Luna II, not on Granada. The only fleet protecting the stronghold was Char's. Knowing this, the Earth Federation planned to drop the Solomon onto the Granada surface, potentially destroying both bases.

The plan was moving accordingly, and the second Solomon assault looked to be a complete destruction of Granada. However, a sudden phenomenon happened after the Gundam's Alpha Psycommu went out of control. The red Gundam emitted a large explosion that disintegrated everything inside it into a void. However, due to the explosion, Solomon completely missed Granada. Losing both fronts at Luna II and Solomon, the Earth Federation moved to discontinue the war. The incident was then called the Zeknova. Char Aznable, alongside the Red Gundam, disappeared inside the Zeknova, never to be seen again, until its appearance in Side 6 from Episode 1 without the Lieutenant Commander.
An homage to the original Gundam

So, regarding the “I wanted to watch a Gundam, and Gundam has started” statement above: the entirety of this episode was a retelling of almost the entire original Gundam series with a different twist. The first scene where the three Zakus were approaching Side 7 was the first scene of Mobile Suit Gundam after a brief background explanation. The difference, however, was Char joining the recon mission instead of Gene (Did you notice that all three Zakus pilots, besides Char, are a pun on pants?). The statement was made famous online in the Japanese Gundam community. It was originally from the Japanese viewers of the Mobile Suit Gundam GQuuuuuuX -Beginning- where the movie's first scene was the three Zakus' scene.
The second episode brought back so many references from the original Gundam. Even the commercial break cue of this episode used the same style as the original.

One of the most memorable lines from Char was his remarks on Gundam's energy gain. It was the same line that Amuro Ray, the original Gundam pilot, said when he first activated the mobile suit. The scene where Gundam kick the other mobile suit was actually the same move that Char used in the original timeline against the Gundam. The only difference was the mobile suits, where Char was inside his own Zaku since he didn't steal the Gundam in the original timeline. It was also interesting to hear that even without the Gundam, the Earth Federation Forces still won against Dozle Zabi's mobile armor in Solomon, hinting that the EFF still has a trump card in their hands.
The Zeknova itself might refer to the unknown phenomenon in Mobile Suit Gundam: Char's Counterattack, where Amuro and Char both disappeared inside the light of the Psycho-frame when pushing the Axis colony back to space.
While the episode was full of references, first-time watchers can also enjoy it. Still, they might get a little bit confused regarding the timeline progression in the episode if they don't pay attention. They didn't explicitly say how much time had passed since Char's success in stealing the Gundam in Solomon, but they hinted that it was enough for Kycilia Zabi to convince Dozle to mass-produce the Gundam.
Overall, it gave a sound backstory to the Red Gundam. However, it didn't gave enough time for Chalia and Char's relationship to blossom, hence making it a little bit weird that Chalia cared for Char enough for him to search for his former senior. Mobile Suit Gundam GQuuuuuuX will continue with Machu's story in Episode 3, where she finally meets with the Red Gundam's pilot in U.C. 0083.