In this chapter, the Alter Rebbe explains what a Wicked person is. Unlike in the previous chapter, where the Righteous strengthen their Divine Soul against their Animal Soul, in the Wicked person, their Animal Soul is stronger than their Divine Soul.
In some people, the "inclination to evil" takes control of the body only for a moment, very occasionally, or takes control of one of the "garments" of the soul (thought, word, or action) and not all of them, or causes the person to commit transgressions of the Torah Less serious, like wasting time on trivial matters. The moment the "inclination to evil" governs his life, he is an evil person.
In other people, the “inclination to evil” controls the body more frequently and with more transgressions, or more serious transgressions.
In both cases, since the Evil One has some good within him, he repents and asks for forgiveness. Hashem, and Hashem He forgives him. Of course, so that Hashem Forgive him, the repentance must be sincere. And what is sincere repentance? To repent means to feel sorrow for one's transgressions. Torah from the past and make a strong resolution for the future not to repeat those same actions.
But he who never repents is someone whose evil completely governs him, and the good he has inside never comes to be expressed.
In the previous chapter, the Alter Rebbe explained that a Righteous person who suffers misfortune is a righteous person who has neither expelled nor transformed their Animal Soul. It resides in their body, but cannot express itself; it is governed by the Divine Soul. With the Wicked, the opposite is true. Although their “inclination to evil” governs them, the “inclination to good” is still within them. It can even cause the Wicked to experience good feelings, such as repentance, but it is not strong enough to prevent transgressions. Torah. This is the Wicked One who is doing well. We say that he is “doing well” because his Divine Soul still manages to express itself.
A wicked person who is doing badly is someone who has become so accustomed to doing evil that their "inclination to evil" has displaced their "inclination to good." This person cannot feel good within themselves, and doesn't even feel bad for committing transgressions. Torah (This does not mean that he no longer has an "inclination to good," but rather that it is as if his "inclination to good" were very far away, and its influence was so little that he does not even feel it.).
This is the opposite of the Righteous one who prospers: his “Inclination to good” expelled his “Inclination to evil”, and he no longer feels evil within him (the Righteous one can completely expel evil from within, but the wicked one cannot completely expel good from within).