Can I share a specific podcast episode in the podcast app ? I know this was previously a limitation.

Yes you can, from the view displaying podcast episodes list. Tap on the " ... " button and select Share Episode.

When I tap on the " ... " button next to an episode, the shared link that's sent out is just for that episode. On iPhone and iPad.

The link does contain the details of the specific podcast, however, when that linked is clicked by another iOS user, it does not take them to that specific podcast episode. It takes them to the main feed of that podcast (channel).