Following the confirmation of Mephisto existing in the Marvel Cinematic Universe in Agatha All Along episode 3, the showrunner explains the mention.

Agatha All Along showrunner Jac Schaeffer has finally revealed details about the show’s Mephisto connection after its third episode aired on5. Mephisto, regarded as one of the most powerful villains in Marvel,

Thanks to the WandaVision spinoff series Agatha All Along , the Mephisto fan speculation is back! I’m sure you all remember how a ton of fans thought that Mephisto was going to be the big behind-the-scenes villain in WandaVision,

The following contains spoilers for Agatha All Along, Episode 3, "Through Many Miles of Tricks and Trials." The Marvel Comics demon Mephisto could soon be making an appearance in Agatha All Along. The likelihood of the character's involvement in the story increased after he was mentioned in Episode 3,

In the comics, Mephisto is strongly connected to the mystical side of the Marvel universe, though he has had tousles with other characters. In Avengers West Coast #51, Wanda uses part of Mephisto’s soul to give birth to her sons Billy and Tommy, which is obviously something he doesn’t take too kindly to and eventually reabsorbs them.

Was that reference an inside joke or an overt wink to the arrival of a powerful Marvel villain? According to Jac Schaeffer, maybe it's both.