First, one has to notice that the exegetical root of the tradition is the repetition of the name of God, YHWH, and the problems which arise from that. In this case, the dangerous doctrine is the idea that there are two different manifestations of God — one, a young man, appearing at the Sea; the other, an old man, appearing at Sinai. As we have it, the tradition is centered around the Exodus theophanies. Dan. 7:9 is ostensibly a proof-text but is also the locus of the same heretical traditions, since two different figures are mentioned there as well. Of course, the rabbis objected to this tradition, saying that the repetition of the divine name was not to identify "two powers" but to emphasize God's unity, since the Israelites would also have to recognize God in another form. In attempting to identify the heretics, we should look for a doctrine which did associate "two powers" with the names for God in the Exodus theophany and in Dan. 7. Obviously, from the rabbinic perspective, but not necessarily at the earliest stage of the tradition itself, this dangerous exegesis became subsumed under the unfavorable category of "two powers in heaven." This text gives us no description of the persons holding such a doctrine.
At the end of the section there is a peroration which articulates implications present already in the designation "two powers in heaven," by directly stating that the doctrine is a threat to monotheism and condemning it roundly with the appropriate biblical texts from Isaiah and Deuteronomy. In fact the verses are so useful as a defense against the heresy as to characterize the opposition to "two powers" throughout its entire history and will be important in the attempt to identify the heretics. The midrash is saying that, though scripture allows for the interpretation that God may be viewed in various aspects, there is a limit to how far one may go in ascribing independent motives to the different hypostases. Not only is there only one God, but there is no possibility of ever deriving a second deity. It was the same God in Egypt who was at the Sea; the same in this world as He will be in the world to come; the same in the past who will be in the future. These descriptions are later rhetorical fluorishes, embellishing and emphasizing an argument whose assumption has been laid down previously. MRSbY even introduces the thoughts as "another interpretation." However, one may ask whether the embellishments are purely arbitrary. In view of the importance of the name of God in this midrash it is not unlikely that the midrash is relying on the mysterious name of God which was revealed to Moses at the burning bush. "I am that I am" is being interpreted with past and future implications of the Hebrew verb forms and is being understood to be an eternal pledge to remain with Israel.
The text in MRI is even more complex and obviously the result of a long history of redaction. Neither MRI nor MRSbY can itself be the ancient tradition. Rather the most ancient layer, which later appear to be tannaitic, must be carefully uncovered in comparing them. The basic structure is similar to the argument in MRSbY and appears to be based on an exegesis of the name of God as well. In MRI the rabbis acknowledge that God manifested Himself in two ways in the Bible. They derive this contention not merely from the repetition of "YHWH" in scripture, as MRSbY did, but from the contrast between the Hebrew name, "YHWH," used to describe the Lord at the sea, and the other Hebrew name for divinity, "Elohim," used to describe God at Sinai. At least one possible conclusion based on the two different names of the deity — namely, that two different divinities, God and Lord, were being described — is condemned as dangerous. Instead, the rabbis suggest that the solution to the paradox will be found at Ex. 20:2, the first of the Ten Commandments, which contains both names of God and declares His unity. Hence, the editor of MRI, by introducing the orthodox solution based on Ex. 20:2, in his commentary to one of the dangerous passages, Ex. 15:3, allowed no opportunity for the orthodox opinion to be compromised. He has also added Ex. 20:2 to the list of effective scriptural defense against heresy.
Though the major thrust of the passage seems evident, it contains many elaborations missing from the MRSbY version, while some parts of its argument remain obscure. For one thing, a new theme of justice and mercy, corresponding to young and old manifestations of God, has been emphasized. This is facilitated by bringing in more proof- texts. Ex. 15:3 is taken only as a proof of God's justice. Ex. 24:10 f. which is part of the Sinai theophany, is introduced as the proof of God's mercy. 5 These two seemingly contradictory biblical verses are compared by the midrash, which then uses Ex. 20:2, the first line of the Ten Commandments, as the third, decisive text with which to harmonize the other two.
MRI in comparison with MRSbY has developed an elegant argument based on the unstated rabbinic doctrine of the Two Attributes of God. 7 This rabbinic doctrine derives two different aspects of God — one merciful (MDT HRHMYM) and the other, just (MDT HDYN)— from the two Hebrew names of God, YHWH and Elohim. » Ex. 20:2, the first line of the Ten Commandments, since it contains both Hebrew names, proves not only that one God was present, but that He was present on Sinai in both His just and His merciful manifestations. The complete argument allows that God can appear in different manifestations — either as a just or as a merciful God or as both — but that it is always the same God and that He was present in both His manifestations when He gave the Torah to Israel.
Although this elaboration is quite sophisticated, there are some difficult aspects to it. For one thing, the two locations adduced in scripture for the doctrine of God's two attributes are puzzling. They imply that YHWH should be seen as the just attribute, while Elohim should be the merciful attribute, which is exactly the opposite of the standard rabbinic identification. [Two Powers in Heaven p. 37 - 39]
The reason why 'Yahweh' is the just god and 'Elohim' the good god here rather than the later rabbinic formulation because the heretics themselves - i.e. the Marcionites and Philo - already testify to this situation.