Audience-Coloring Adaptation: This fic is replicable for the Ron the Death Eater treatment of Pinkie Pie, with practically all other works vilifying her taking cues from her portrayal here.
This story is very frequently cited as a creepypasta. It was never intended to be one. It's a fanfic, or a Dark Fic more specifically.
Everyone "knows" this fic started the trend of Pinkie having a violent, stoic alter ego that goes by "Pinkamena Diane Pie", inspired by a disturbing scene in "Party of One" where a flat-haired and schizoid Pinkie has a conversation with various inanimate objects. Not only was the fic released before "Party of One" premiered (and, for that matter, before "The Cutie Mark Chronicles", where the name "Pinkamena Diane Pie" originates from), but Pinkie is her usual curly-maned and cheerful self despite torturing ponies to death, and this supposed "Pinkamena" alter ego never appears at all. A lot of the unease of the fic comes from the fact that Pinkie, as her normal happy-go-lucky hyperactive self, is either unaware of or apathetic to the horrors she's committing; an evil and murderous alternate personality would defeat the whole point. The blog Ask Pinkamina Diane Pie probably didn't help.
In the story itself, Pinkie wears a dress made of stitched-together cutie marks and wings of many ponies. One famous piece of fanart shows that Luna's cutie mark is among them, leading fans to assume that this fanfic's version of Pinkie managed to murder a Physical Goddess, something which even TV Tropes claimed was part of the story for years. The actual story, however, never specifies whose cutie marks make up the dress, and Luna is never mentioned at all.
Creepy Cute: Pinkie Pie, of course. But who could forget Apple Bloom?
Epileptic Trees: Pinkie's line "I don't make the rules" has led to lots of speculation that she isn't truly in control of her actions, that somebody or something else is really in charge of what's happening (or at least backing her), and/or that she's not the one who's actually committing the murders:
Fanon: Fanworks always portray Pinkie as her depressed, straight maned "Pinkamena" instead of the normal Pinkie. Even though the fic was made before, not after, Party Of One.
Harsher in Hindsight: A certain episode of the main series features a scene where Rainbow Dash visits an insane Pinkie Pie by herself. There aren't any gory torture scenes but it will make those who are familiar with the fic feel more than a little uneasy.
It Was His Sled: Pinkie Pie is a psychopath. The fact that this story was "Grimdark as Fuck" was intended to be a big twist originally, which explains the innocuous title and beginning. Seeing how this story has been mentioned all over the internet and the fact that it is labeled as "Grimdark as Fuck", it's safe to say that twist has long since been spoiled and the main reason anyone knows about it is because of its reputation as "The My Little Pony torture fanfic".
The fanfiction was so notorious within the fandom that it even got its own confirmedKnow Your Memearticle.
The mental imagery caused by the basic premise of the plot itself, the shocked/disgusted/horrified reactions to the fanfiction being spread around by fainthearted readers (or at least those who have heard of it but haven't read it yet due to fear of being scarred and traumatized for life) across the Internet and the various fan arts it gained had made the fanfiction appear much worse than it actually is.
Memetic Psychopath: This fic is single handedly responsible for turning Pinkie Pie into one.
Narm: For anyone who can look past the described atrocities themselves, the overly excessive descriptions of gore and Body Horror can come across as darkly funny. In fact, this is partially intentional on the part of the author, who wrote it as a challenge to write the most schlocky Exploitation Film-inspired fic he could, especially with all the bad jokes Pinkie cracks while disembowling Rainbow.
Nightmare Fuel: The whole story is notorious for being one of the most terrifying MLP fanfics ever written. A helpless Rainbow Dash is gruesomely tortured to death by Pinkie Pie, all described in horrific detail, then baked into cupcakes which are fed to unsuspecting customers. Ever since the early days of the fandom, it's been famous for giving readers nightmares.
Nightmare Retardant: While many readers do find the story genuinely horrifying, others think that the poor grammar of the writing (though a rewrite exists that corrects this) and various bits of Fridge Logic make the story hard to take seriously.
Once Original, Now Common: Much of the fanfic's infamy came from the fact that there were hardly any grim-fics in the fandom back then. Cupcakes took nearly everyone by surprise. But now? With many other dark fics that rival that of Cupcakes (like Rainbow Factory, Fallout: Equestria and Fallout: Equestria - Project Horizons), the shock factor that held it up isn't there anymore.
Squick: All of it, but mostly the part where Pinkie Pie squeezes Rainbow Dash's intestines to get rid of the bodily fluids inside them, then flosses her own teeth with said intestines, and to top it off, Rainbow pisses herself twice.
What Do You Mean, It's Not for Kids?: Despite the fic and all resulting fan-animations being written by and clearly meant for bronies, a very good chunk of the views for the YouTube animations of the fic were from little kids who were fans of the original show. In fact, in the modern day, the Cupcakes fan animations hardly have any comments from current or former bronies; almost all of them are from teens and preteens rewatching the animations that they first saw as children, which either traumatized them or suddenly gave them an interest in gore.
The Woobie: You really can't help but feel horrible for poor Rainbow Dash.
, is a noticeable example of this possibility.