This scene is Luffy talking to his evil reflection. The roar sounds bring Luffy into this one to one meeting like it's destined to happen. Both of them are Sun God of Elbaph and have an axe on their back. On their objective, Loki wants to bring an end to world while Luffy wants to free the world from chaos.
Loki sorta parallel of Oars from Thriller Bark because
-They are both chained up in freezing cold temperature.
-Oars have Luffy's shadow in him while Loki portrait himself as the Sun God which belongs to Luffy.
-Both have horns.
-Oars with Luffy's shadow is the strongest enemy in Thriller Bark which can mean the same to Loki in Elbaph.
Oars is just a villain in Thriller Bark, the main villain is Moria and he is weaker than Oars which means the main villain of Elbaph is someone else. There are other characters who were mentioned before entering Elbaph like the guy sitting on the shore and the Elbaf guy mentioned by Broggy, they are likely the candidates of being the main villain.
Therefore Loki is likely a villain, Luffy will defeat him and he will somehow become good.
I believe he will turn into good person because of the broken left horn. Left side wounds are said to be a reference of Amaterasu and all good guys have left sided wounds. Maybe all except Saturn, I don't know why.