She was on drugs, but they were keeping her judgement impaired by keeping her strung out on opium. When she confronted Elsa she commented that she was sober enough to know what's going on now, and Elsa showed her the film of Penny enjoying the debauchery at the time, even though Penny couldn't even remember it…

One problem, that wasn't Penny seeing a woman that looked like her engaged in debauchery. That was Penny seeing footage of herself being drugged and gang raped. Call a spade a spade. That scene is making it really difficult to empathize with any of the freaks at all, though I suppose that may be the point.