WARNING: The following contains spoilers for My Hero Academia Season 5, Episode 7, "Match 3," now streaming on Crunchyroll, Funimation and Hulu.
One of the most important dynamics of My Hero Academia is slowly changing. The strained rivalry between Midoriya and Bakugo is shifting as they become older, more experienced and more aware of what it truly means to be heroes. Since the beginning of the series, Bakugo has played the perfect shonen rival for Midoriya, constantly challenging him to grow and become a better version of himself. However, while Bakugo's antics seem aggressive, mean and short-tempered, Season 5, Episode 7 shows a different side when he stumbles upon a private conversation between Midoriya and All Might.
Since Bakugo is one of the few people that know the truth about Midoriya's Quirk, he also knows about both the potential and risk it carries. So while Bakugo still veils his concern with insults, he's ultimately trying to push Midoriya forward in a way that's still indicative of their relationship -- through rivalry.
Bakugo wants to be the best hero just as Midoriya does, which initially caused the rivalry between them. Only one can become the next Number One hero like their mutual idol All Might. However, now that Midoriya has inherited One For All from All Might, Bakugo knows the race for achieving that goal has become more competitive.
Initially, Bakugo's anger and potential jealousy were probably well-founded since he felt Midoriya had lied to him regarding his Quirk. However, Bakugo put the pieces together further after his capture by the League of Villians, and everything came to a head. Where Midoriya became the star pupil and successor to All Might, Bakugo blamed himself for their idol's retirement. In the end -- after their emotionally charged fight -- Bakugo knows that Midoriya admires All Might just as much as he does. Now, he constantly reminds Midoriya not to waste this chance because if he were given the opportunity, Bakugo wouldn't squander it.
So when we see Bakugo stumble into Midoriya's conversation with All Might, he only tells them to be less conspicuous about their meetings since people are starting to notice. Even though he says it in a gruff, rude tone, he means the very best. This comment is a small show of support from one rival to another. Bakugo hasn't admitted defeat, though -- he will still work his hardest to become the best hero he can be, despite Midoriya inheriting such great power.
Bakugo's realization has changed the shape of his and Midoriya's relationship. While they are still rivals, Bakugo no longer sees Midoriya as an obstacle on his path to success. Instead, Bakugo realizes that Midoriya's path will be difficult, and the two of them should each go Plus Ultra to reach the top. While their dynamic still has the typical Bakugo attitude, it's no longer quite as malicious and instigative now that they've hashed things out, laying all their cards on the table.
Bakugo and Midoriya will continue to challenge and press each other, but now it's for the purpose of bettering themselves as heroes. The focus is no longer directly on themselves, but on what they can bring to the citizens around them in terms of hope and protection.
While My Hero Academia: Two Heroes may not be canon, it too showed how Midoriya and Bakugo's rivalry has matured. In the film, Bakugo experience the power of One For All firsthand. Even without that moment, Bakugo is now in a position where he no longer sees Midoriya as a threat to his success. This means that their relationship can blossom into less of a heated rivalry and more into one born out of friendship and a desire to improve. Midoriya and Bakugo both understand that being a pro hero means putting your own needs aside for the good of the people, so their relationship will only further their skills and experiences as they grow.
