I wasn't sure at first what to make of this strange prelude, which is probably why I put if off for so long. But as with many of the lesser-known pieces in the WTC, the devil is in the details. Quite literally in this case. After a few weeks of practice, it finally occurred to me that Bach is playing with dissonance here, specifically the tritone interval, formerly known as The Devil in Music.
A tritone refers to two notes that are three whole tones apart from each other, i.e. C and F-sharp. It's hardly what we would consider dissonant or even unusual today, but The Devil in Music was specifically banned from sacred music by the Council of Trent in the mid-16th century. By the 1700s it had lost its taboo but retained the devilish connotation. Bach uses it a lot in his cantatas where the Devil makes an appearance.
In addition to the tritones all over this prelude, Bach adds those wicked gestures at the end of the main subject... think the devil's tail lashing the damned. (Use your 18th century imagination.) Long pedal trills and profuse ornamentation also have demonic connotations in Bach's music. They certainly tormented me!