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We here get a bit of philosophical speculation on why Claggart is such an ornery and disagreeable fellow.
The narrator admits that if he gave some back-story suggesting that Claggart's dislike of Billy is rooted in the past then it would be more believable, but the problem is that there is none.
In some cases, it is just impossible to explain why one human being dislikes another, and this is one of those cases.
The situation is particularly bad though because there aren't too many places worse than a ship for two enemies to be stuck with one another.
Claggart is a unique man, a mystery. It's possible to know a great number of things about the world and "human nature" without understanding what goes on inside him.
Perhaps, to borrow a phrase of Plato's, he has an innate "depravity according to nature" that simply cannot be understood (11.9).
The narrator suggests that men like Claggart are a bit like madmen. They are dangerous because only a few things incite their madness and so most of the time they can blend in perfectly with the rest of the civilized people.
With all the caveats listed, the narrator says that, from here on out, the events will simply have to speak for themselves. In essence, then, he throws his hands up in the air when it comes to explaining who Claggart is and what he is doing.