This passage perfectly illustrates the point that A.S. Byatt is trying to make about gods, war, and destruction on earth (or in this case, in the mythical world). It is a beautiful passage because it illuminates so clearly how the gods feel about the death of the gentle, beautiful Baldur. The way it is written makes the grief and sheer shock palpable. It emphasizes that which is impossible can become possible. It is a paragon of incredulity. This is further emphasized with the fact that thin girl herself cannot even begin to imagine what is going on.
This all ties in to the themes of the book. It makes a statement about the carelessness of the gods and those with power. The gods act reckless and thus pay for it. Furthermore this passage sheds light on the futility and fleeting nature of life. With these themes in mind, as well as the craftily composed syntax and imagery, this is one of the strongest passages I found in reading this book.