Smiling Friends / Tear Jerker

You can't have smiles without frowns, after all.

"Desmond's Big Day Out":

Despite all of his losses being over the top, the fact that Desmond lost virtually everybody in his life that he loved, from his wife, to his his children, as well as his dog dying makes it very easy to feel sympathy for him.
After Pim's last attempt to cheer Desmond up fails, Charlie tells him they need to go back to the office to sign some paperwork, and then "you can do what you've gotta do." The defeat in Desmond's voice as he replies with "okay" is subtly heart-wrenching.
Pim in general gets his optimism slowly broken down over the duration of the episode. By the end he's a disheveled, desaturated husk.

Dark comedy aside, Shrimp is so heartbroken over his breakup with Shrimpina that he's been reduced to a veritable hermit, doing nothing but play Mouse Quest all day with the curtains closed.
Pim's daydream about him marrying, starting a family and growing old with Jennifer is shockingly heartfelt for such a crazy show. But alas, after Jennifer meets Shrimp and falls in love with him, it's a dream that's all for naught.

Charlie and Pim are genuinely devastated when their fighting leads to Mip getting impaled on a stray spear. Downplayed when he's later revealed to be a stalker and the present that killed him turned out to be a pipe bomb for the Princess.

The Boss's mental breakdown over the course of the episode is this combined with Nightmare Fuel, due to how painful it is to see this cheerful, saintly, kind-hearted and lovable old man who is in many ways the ideal boss that any employee would want being slowly and painfully reduced to a snarling, gun-toting maniac, especially since he's clearly struggling with all his might to find a peaceful way to deal with the titular rival business and losing himself from the anxiety and stress he causes himself, which culminates in him climbing into his secret thinking room, where he then hallucinates his reflection as a hostile, verbally abusive version of himself with a demonic voice who torments him and eggs him on to kill his rivals, which he refuses to do until the mirror-boss manages to get him to cave in, and even then, he clearly regrets having to do so, with the melancholic, resignated tone of voice he takes as he goes to get his rifle being heartrending to listen to considering how lively and cheery he usually sounds.
Mr. Boss: (Going to get his rifle) "Perhaps...you're right... Perhaps I should do what I should've done...from the start...

The Stunned Silence from Alan and Pim when Charlie gets crushed under the tree. Pim covers his mouth (just like he did when they found Desmond with a gun pointed to his head) in sheer horror. Even Glep is shocked by his sudden death.
Just moments before Charlie dies, he and Pim were arguing about how Charlie's cynicism tends to bring down the mood of everyone else in the workplace. Charlie was in the middle of a snide comeback when he gets crushed by the tree. Even if the funeral took a day right after he died (given that the boss calls it a Christmas miracle), how long did Pim have to live with that being the last he'd ever see of him?
When God chucks Charlie back down to earth, we get a glimpse of his own funeral. Everyone from Smiling Friends is there, alongside Dave from Daveland and the redhead girl from the Halloween episode. Pim seems to be taking it the hardest, given that he's visibly trying not to cry the entire time. Right as they lower the coffin it seems like he's going to break down completely.
- The Boss rapping for his eulogy, while also funny, shows how much he did care for Charlie.
  Mr. Boss: Charlie, what does it mean? Charlie, you were my everything! World's fucked up, man! Charlie, am I losing my goddamn mind? If it's gone, where can I find... it? [mic drop]

Gwimbly's reaction to Mr. Millipede's grave. Gwimbly having been washed up for so long, he never learned that his old friend had passed away from a fentanyl overdose, lamenting that Mr. Millipede was "like a damn brother to [him]" and pours one out on his grave as his iconic victory voice line trails off into defeated sobbing.
Gwimbly: It's just wrong, man...
The Stinger where James is seen in his messy apartment, drinking and reduced to tears as he admonishes himself for pushing away Charlie who just wanted to help him. Where or how he got a framed a picture of Charlie is never explained, but it's clear James appreciated him and hates himself for his arrogant, self-destructive behaviors.
James: You did it again, James. You pushed away the one guy who actually gave a damn about you... [sobbing] Shit...!