This takes place sometime after Discord's resealing and this is the actual lasting effect it has had on Fluttershy.After all, what better way to ensure a successfull third coming of Discord than to remove one of the Elements from a state of mind where she can function in her role.
This was an actual episode.Just like my Cupcakes WMG, this episode was made just for fun and not meant to be released. But the same thing that happened with Cupcakes happened with this. It accidentally gets broadcast in another country, children are scarred, some guy in the US finds out and writes a story about it.
Princess Celestia and/or Luna will save everyone not in on Fluttershy's machinationsWe can hope, can't we?
No, because Princess Celestia is in the Conspiracy. In fact, she taught Fluttershy infantilism in the first place, and used it to completely Mind Rape and dominate Twilight Sparkle.Hence why Twilight is completely dependent and afraid of failing Celestia (e.g. "Lesson Zero"), to the point that she perceives her as an Abusive Parent ready to hand out most humiliating punishments for Thought Crime.
Fluttershy, Rarity, and the people in the photos are Changelings.This is all a sham to break Rainbow Dash and Scoot for their own nefarious purposes.
Discord will be unleashed....And will not mindrape the Mane Six. After all, Fluttershy (with minor assistance from the others) just made themselves powerless to stop him. In fact, he'd THANK them for helping him. And what better way thank them than make the have perfectly clear minds as they witness Equestria become a eternal realm of chaos......And it's all their fault.
Pinkie Pie's involvement.I think the only reason Pinkie is helping Fluttershy is for chocolate milk rain!