I think after considering the various narrative constraints, I am beginning to agree more with the assumptions and conclusions Darkmirage set forth in his rant about infinite energy via time traveling. Oh, spoilers for Madoka Magica onward, I apologize.
It’s one of those persistent paradoxes in which some other issues have to be reconciled in your model of time traveling in order to make sense of it all. In that sense, the physics is not as important.
Time traveling by itself can be consistent with the Second Law. Certainly, the arrow of time can go forward as usual, and traveling to the future is something all of us do. One form of time travel is just going to the future faster than everybody else.
The reverse situation, too, can be tied to some kind of mechanism in which the net total entropy is a positive value. The question thus becomes more in the lines of conservation of mass-energy, and, as always, linearity of states.
There are good reasons to assume that the typical groundhog day mechanism implies a single, linear outcome of cause and effects, in which one cause at a certain time propagates consequences irrelevant of each “reset.” Here, Homura’s resets are played fast and loose; it seems that she can reset at will, even if Madoka survives the bewitching eve and the big bad witch of the west is slain. More importantly, it doesn’t seem QB maintains memory of Homura.
So what does that mean? It means Yuki Nagato is still better than QB. It also means that we don’t know what gets transplanted back in time. It may very well be that nothing “physical” gets passed back, and we can’t really say anything about it until we know more about soul gems and souls.
TL;DR: The Big Reveal episode teaches us very little, if anything, new that we didn’t know before, about the xenophysics of Madoka.
So why am I slowly changing my position? I think if QB’s race can create a system where people can travel to the past with that sort of information, they would have came up with a way to pass the information on reducing entropy to an earlier point in their civilization. In other words, while Homura is a determined little girl who is driven by undying hope and love, there’s nothing stopping an entire race from doing the same. Thankfully, I don’t see how we can take any of the known setting elements out of its presentation and make an argument that bypasses the black box of the soul gem. And so until they explain that to us, we’re going to be in the dark. At least the objection of “a wizard did it” only applies in the time traveling mechanism, but maybe wizards like the taste of white mascot animals with ears coming out of their ears, and that is what makes them so.