After watching Michael's blind man act, Pam admitted that "It's good to be home." But this was before Michael unleashed the terrifying news, first to Jim, and then to Pam. This episode shows Jim and Pam at their angriest. Jim, in his effort to protect Pam, only leads to him picking up more of Michael's bad habits, such as witholding incriminating information and using bad humour to deal with the situation. Despite being caught in the middle, Jim returns to his old self to feud with Dwight over a mallard, after the cat is let out of the bag.
Pam on the other hand, is completely overwhelmed with disgust, disbelief, and betrayal. In her anger, she has resorted to inciting rebellion in the conference room, arguing with her mother over the phone, and screaming in the middle of the parking lot. But she also has the right to do so. After everything that Michael has put her through, from accidentally showing her his penis, to trying to kiss her, Pam shows that she too has a breaking point.
But for Michael, as Oscar pointed out, he has no respect for boundaries. It's also in this cluelessness that makes him so unknowing, and completely unfazed at the reactions of other people. It's this obliviousness of his that has led to his victory when he started his own company, yet, also led to a break-up after photoshopping his head onto Carol's ex-husband's body. In this episode, like most times, his delusions contributes to more harm than good. The discrepancy between how Michael feels and how others perceive him leads to him somehow twisting the knife even more with imageries of him as a father-figure, or the car seat going "all the way down." Whether it is giving a speech on what is wrong with him, or by forming an unlikely alliance with Toby, the end result is Pam feeling more hurt.