The merman is laudable in wanting to return to the universal because he is wanting, in spite of the obstacles in his way, to face the ethical duties that everyone must face. He has placed himself in a position where realizing the universal is humanly impossible, and he must achieve it by virtue of the absurd.
We should note that there is some connection to Kierkegaard's personal life in the story of Agnes and the merman. The story alludes to Kierkegaard's break with his fiancée, Regine Olsen. In Either/Or he had hinted, in a famous section called The Seducer's Diary, that, like the merman, he was simply a seducer who had tricked Regine into loving him. This behavior might be equated with the demonic, where the merman wants to get Agnes to hate him so that she will not suffer the pain of being separated from one she loves. In this passage, Kierkegaard's explanations become more complex, as he presents Regine with several possible alternatives to explain his behavior.
Like the merman, Sarah also rejoins the universal by virtue of the absurd. She has faith that her marriage to Tobias will not end in disaster, and she is willing to accept the responsibility for his life if it does. Rather than isolate herself from the universal, she makes a leap of faith back into the universal.
Faust, like the fasters mentioned in the Sermon on the Mount, enters as a single individual into an absolute relation to the absolute. Both Faust and the fasters in their different ways enter into a private relation to God, and thus their actions need not be justified to the universal.
Though the particulars are difficult to decipher, the general thrust of this section of the text is straightforward enough. Johannes uses these examples to show that the single individual can sometimes be isolated from the universal and justified in acting against its principles.