Ok, I’m certain now.
Witch magical girl (sorry, I had that backwards and just noticed)… impurity generated by casting magic (edit: to defeat the witches). And when the grief seed has absorbed so much impurity from the puella magi that it’s totally black, it will generate a witch — except Kyubey absorbs it first.
He’s using them to farm for his food? Or is it a closed loop, in that he’s generated the witches and grief seeds himself? Probably a violation of the Second Law of Magidynamics, but that’s magic for you.
Then of course, there’s the big reveal of the episode, which I’m going to hide inside a second spoiler, so bail now if you have not seen the episode. I really, really, really mean it. I’m not trying to be funny. I really think you shouldn’t read it, unless you have no intention of seeing the episode.
Ok, on your head be it.
When Kyubey turns a girl into a puella magi, he doesn’t “create a soul gem linked to the girl.” He actually removes the girl’s soul, and it literally IS “the soul gem.” The body is effectively just a remote control robot. If the body is separated from the gem by more than 100 meters, it will stop functioning.
And Kyubey just doesn’t understand why it upsets any girl he tells. It becomes terribly obvious that Homura already knew this, but the murderous redhed girl didn’t, and she’s really not happy with Kyubey. As in grab him by his ears, and scream in his face upset. “What the hell did you do to us????”
I think I’d be a little upset too.