To describe Arjun’s feelings, Sanjay uses the word kṛipayā, meaning pity or compassion. This compassion is of two kinds. One is the divine compassion that God and the saints feel toward the souls in the material realm, on seeing their suffering in separation to God. The other is the material compassion that we feel upon seeing the bodily distress of others. Material compassion is a noble sentiment that is not perfectly directed. It is like being obsessed with the health of the car while the driver sitting within is famished for food. Arjun is experiencing this second kind of sentiment. He is overwhelmed with material pity toward his enemies gathered for battle. The fact that Arjun is overcome by grief and despair shows that he is himself in dire need of compassion. Therefore, the idea of his being merciful upon others is meaningless.
In this verse, Shree Krishna is addressed as “Madhusudan.” He had slayed the demon Madhu, and hence gotten the name Madhusudan, or “slayer of the Madhu demon.” Here, He is about to slay the demon of doubt that has arisen in Arjun’s mind and is preventing him from discharging his duty.