After Sayaka is turned into a witch, Madoka and Kyoko go and attempt to save her. However, before they can get to Oktavia, the barrier vanishes. Homura appears saying she got rid of the witch. Kyoko is furious with Homura and wants to kill her, but Madoka says that isn't what Sayaka would've wanted.
Madoka is saddened about Sayaka's death, but Kyoko says she shouldn't cry about every bad thing that happens to her.
When Walpurgis comes, Kyoko thinks Homura is just hiding herself, but when she feels the shocks from their magic clashing, she decides to ask what Mami and Sayaka would do, and goes to help her.
Even the two of them aren't enough to defeat it, and Madoka, despite going against Homura and Kyoko's advice, turns into a Magical Girl and decides to help them. She destroys Walpurgis in one hit, and because she exhausted all her magic, turns into the witch Kriemhild Gretchen immediately. Kyoko calls out to Madoka, but Gretchen kills Kyoko in one hit. Homura resets the timeline saying she won't let it end this way next time.
Because the ending is determined by whether or not Kyoko's Soul Gem is completely dark or not, you need to be careful with your magic consumption so that Kyoko's Soul Gem doesn't go completely dark. And even if you want the bad ending, you should only use magic near the end of the barrier so that Kyoko can survive it.