I don't think anyone is taking the word "episodic" and thinking it's the shorthand for Telltale games' Walking Dead structure.
Square Enix has clarified and specifically stated that they'll be "full size games". But to the skeptics defense - we have no idea what SE means by that or what it'll entail progress wise.
I HIGHLY doubt Square will implement a structure where you carry your save data over from previous "episodes". Bioware tried that, but it was a half baked idea and it didn't work... What will their contingency plan be if someone buys Episode 2 but never played the first?
These kinds of questions point to a potentially polarizing design philosophy that SE has in place that won't have OG FF7 players best interests - the people that got to play as a whole game....
Personally, I don't buy the reasoning for their "episodic" bullshit. If the size of the game they want to make is truly too big to fit on one disk/in one game (their words, not mine). THEN SPREAD IT ACROSS MULTIPLE DISCS LIKE YOU USED TO DO IN THE 90'S!!!!
They're doing it with FFXIV Online, which I think would be preferable, for example each FFXIV expansion is a full game, but you can't advance to the new one without having the prior expansion complete, because it's all one continuing story. And, yes everything is carried over.
That would be a disastrous idea....