Xenosaga Episode 1 was the worst paced game of the Xenosagas, probably by far. But I also found it by far the most immersive of the three. It’s definitely the one I had the most fun playing (except for the Encephalon, which I have always had issues with). Episode 3 had a lot of big events, but it comes off as a very rigid and unnatural delivery compared to part 1 - it is far from an immersive game. It has the benefit of having the ending of the series and a lot of density in the plot, but it is still overall a much smaller volume of subplots than the first Episode.
In short, I recognize the pacing issues with Xenosaga Episode 1, and how it would turn off a lot, but that’s how art tends to be. To be fair, it wasn’t the long story sequences I found to be trying my patience, it was the longer gameplay segments (particularly the Encephalon). I actually really enjoyed the long cutscenes and longer interactive story segments... I loved wandering around the ships and getting everyone's takes on the events that were occurring, and digging deeper into the story that way. While the delivery wasn’t necessarily the most ideal, I really enjoyed loggin into the UMN and reading all the articles on everything; it reminded me a little of the historical logs in Final Fantasy Tactics and Ogre Battle 64, as well as Selphie’s blogs on Final Fantasy 8 (I am willing to bet that’s where Takahashi got the idea - since FF6, 8, and Chrono Trigger we’re fairly big influences on his work... although, since he was on the design team for all three games, the similar stuff in those games may actually be his concepts/work).