This short scene in Act III acts as foreshadowing of Shylock's later ignominious defeat, and is also representative of the divisive presence of Shylock in the drama.
Called by critics a "villain both farcical and scary," Shylock seems to embody the dark corners of ancient Venice with his character as he is one of the "petty traffickers" to which Antonio alludes in Act I. He is an isolated figure, and this scene from Act III underscores his isolation as well as foreshadowing the culminating alienation he will experience as he is even separated from his own Jewish race by his forced conversion to Christianity in Act IV. For, even his daughter finds him despicable, declaring that she is "ashamed to be my father's child!" (l.17)
Even so, this scene tends to counteract the negative first impression given the audience by Shylock who, in his resentment and hatred for Antonio would "feed fat the ancient grudge" he bears him. For, those closest to him, Launcelot and his daughter Jessica, do feel guilt as they malign him with their speech:
JESSICA: I am sorry thou wilt leave my father so....
LAUNCELOT: These foolish drops do sometimes drown my manly spirit.
Nevertheless, Shylock is such a villain that they feel the need to break from him; also, this scene further develops the subplot of Jessica's relationship with Lorenzo.
In Act Two Scene Three of 'The Merchant Of Venice' by William Shakespeare, the stanzas unfold the story of how Jessica (Shylock's daughter) says good-bye to Launcelot. Jessica explains to Lanecelot that life with her dad was easier to bear when Lancelot was around. She passes him a letter which she wants him to give to Lorenzo,Bassanio’s friend.Launcelot starts to get very upset when he has to leave, welling up so much that he can hardly even wish her good-bye properly. Now that Jessica is all by herself, she admits that even though she feels bad about her negative feelings and shame over her dad she is not responsible for the connection - she did not choose him as an associate - rather it is accidental as they are bonded by blood and family not choice - so really it shouldn't look bad on her about what he does. She wants to get away still ,from what she sees as a connection that will see her damned for his actions. One way of getting out of it would be to be Lorenzo's wife and she would even consider becoming a Christian.