While past episodes have felt more character focused, "Six Short Stories About Magic" was definitely plot driven, which took some of the magic out of it for me. That's not to say it wasn't good. In fact, the episode playing with its structure was one of the coolest things its done all season.
It was, of course, a very meta writing decision, but as we know, that's part of this show's distinct identity, so it definitely worked for me.
The episode begins with Penny visiting the Underworld, where we learn that Benedict is in fact dead. He's also very upset that Penny doesn't seem to be there for him.
I assumed he was hiding the key based on his reaction, which, by the way, was not a cool move.