This scene comes immediately after Shidô's death. It fits between episode 11 and 12:

Sarasa has come back after her showdown with Shidô. Everyone is rebuilding the newly risen Suzaku Village. Meanwhile, Senju is stricken with grief, and comes to Tatara's camp for revenge. She has become a bit crazed: notice how she's wearing Shidô's metal thingies on her head.

The assassination attempt is thwarted, and Senju is let go. But during the commotion, Nagi senses that Senju is pregnant with Shidô's child and shocks her with the news. Nagi also tells Sarasa that this is the way things are in wars: it doesn't matter if you're right or wrong, if you kill someone, you are a murderer to that person's loved ones, and they will come after you. So in a way, Sarasa has become someone else's Red King. And this devastates her.

In my opinion, this is a very important scene. Sarasa finally has to face the consequences of war, and realizes that there may be no right and wrong in any conflict. It was naive and selfish of her to think in terms of good vs. evil, and call the Red Army demons. Because her enemies are no different from her.

If you got the impression Sarasa wasn't too affected by Shidô's death in the anime, it's because this scene was cut out. And for those who have seen episode 12, you may recall how she got REALLY pissed at the Blue King and broke down in front of everyone. Well, her speech about the value of human life is in direct reference to this scene.

NOTE: The Basara manga is not available in English. What you see above are excerpts of fan scanslations done by Manga Project.