Solid‐state lithium‐sulfur batteries (SSLSBs) have the potential to cause a paradigm shift in energy storage. The use of emerging highly‐conductive solid electrolytes enables high energy and power densities. However, the need for an intimate mixture of electrolyte and conductive additives to compensate for the insulating nature of cathode active materials S8 and Li2S induces intense electrolyte degradation. Thus, it is paramount to understand better the electrochemical and transport properties of the cathode composite with extremely high interface density among cathode components. Here, by utilizing a ball‐milled composite of the lithium argyrodite Li6PS5Cl and carbon as a model electrode, the stability, reversibility, and transport in the composite as functions of cathode loading, the volume fraction of conducting phase, temperature, and applied potentials are comprehensively investigated. Comparing the onset potentials of electrolyte degradation and the sharp drop in the effective ionic conductivity of the composite determined through transmission‐line model analysis, successful enhancement of the capacity retention of SSLSBs is demonstrated by balancing between the attainable capacity and effective carrier transport, achieving a high areal capacity of 3.68 mAh cm−2 after 100 cycles at room temperature. The here‐observed analysis is applicable to any solid‐state composite with electrically insulating active materials.