Juvia is scary strong when she wants to be, this is definitely paving the way for Juvia rampage time, this time likely worse than we've seen before.
There's too many ways for Gray to come out of this OK, though. Ice clone, the working time machine sitting around, Ultear learning a new trick, someone figuring out how to heal, etc.
Also, why haven't we seen Fairy Law or some other megaspell be used yet?