It's a clunky sentence, because it's trying to cram too much in; but it's entirely grammatical.
indicate and is fall together because what lies between them in an ordinary declarative sentence has been 'moved' to the front of the sentence to cast the sentence as a question.
Let's shorten the sentence, for clarity, and unpack it into its declarative form:
Which X does each passage indicate is typical?
↳................↓ (take out the do-support)
Which X Each passage indicates
↳................................↓ (put the interrogative back in its ordinary place)
Each passage indicates which X is typical
That's how wh- questions work: the 'value' you're looking for is indicated by the wh- phrase, and where it fits in the sentence is indicated by the 'gap', the place where something is missing.