Sefat Emet, Genesis, Vayishlach 13:4

ובמדרש ויירא שמא יהרוג ויצר שמא יהרג כו’ רמזו על הנ”ל. כי ירא שמא אם יתרחק ממנו לגמרי יהי’ נדחה עשו על ידו. ואם יתקרב אליו פן יזיק לו לקדושתו. לכן ויחץ כו’ כי לא הי’ יכול להיות בהאחדות האמת כשהרשע לנגדו. לכן אמר קטנתי כו’. ואח”כ כשעלה בשם ישראל נפסק המלחמה עם עשו. כי כל שם יעקב בעודו לוחם עם עשו כמ”ש וידו אוחזת. לכן הובטח לא יעקב יאמר עוד. פי’ שלא יצטרך לעסוק עוד בבחי’ עם עקש תתפתל. רק באמת האמיתי בלבד. ושינוי השם הוא כמו בריאה חדשה שנתרומם אבינו יעקב. לכן היה מקודם קטנות כמו קטן שנולד שנעשה בריה חדשה:

And in the Midrash: “He was afraid lest he kill, and distressed lest he be killed,” alluding to the above. For he feared that if he were to distance himself from him completely, Esau might be pushed away because of him. And if he drew close to him, perhaps Esau would harm his holiness. Therefore, “he divided…” for he could not be in true unity while the wicked one stood before him. Thus he said, “I am unworthy…” And afterward, when he rose to the name Israel, the battle with Esau ceased. For the entire identity of “Jacob” is while he is still fighting with Esau, as it is said, “and his hand grasped…” Therefore he was promised, “No longer shall Jacob be said…” meaning that he would no longer need to engage in the aspect of “with the crooked you show yourself twisted,” but only in the true and perfect truth. And the change of name is like a new creation, for our father Jacob was elevated. Therefore beforehand there was smallness, like an infant newly born who becomes a new being.

The Sefat Emet explains that Jacob’s fear contained two opposite dangers: distancing himself entirely from Esau might cause Esau’s spiritual downfall, yet closeness might endanger Jacob’s own holiness. His division of the camp reflects the impossibility of perfect unity while confronted directly by wickedness. Jacob’s sense of smallness was a necessary stage before receiving the name Israel, which marked a new spiritual creation and the end of his struggle with Esau. With the new name, he rose beyond the realm where one must adapt to opposition, entering a state of pure truth.

Summary: Jacob balanced fear of harming Esau with fear of spiritual harm to himself. Only after becoming “Israel” was he released from the struggle inherent in the name “Jacob,” entering a new, elevated state of pure truth.