Here are some excerpts from Swedenborg's "Arcana Coelestia" that help explain the inner meaning of this chapter:

AC 1890. The subject treated of in this chapter is the Lord’s first rational, which was conceived by the influx of the internal man into the affection of memory-knowledges (scientiae) of the external. The internal man is "Abram;" the affection of memory-knowledges in the external is "Hagar the Egyptian handmaid;" the rational thence derived is "Ishmael." The nature of this rational is here described; and it is afterwards said (chapter 21); that it was expelled from the house, after the Lord‘s Divine rational, represented by Isaac, had been born.

AC 1891. The Lord’s first rational was conceived according to order by the influx or conjunction of the internal man with the life of the affection of memory-knowledges belonging to the external (verses 1 to 3). But as this affection was of the external man, its nature was such that it held intellectual truth in low esteem (verse 4). On which account the Lord thought concerning the subjugation of it (verses 5 to 9), and that when subjugated, it would become spiritual and celestial (verses 10, 11). What it would be if not subjugated, is described (verse 12); the Lord‘s insight into the cause from His interior man (verses 13, 14). The rational is thus described in respect to its quality; also the Lord’s state when it originated (verses 15, 16).