Pattycakes/WMG
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 machinations
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.