This room appears early in the main game, where Sebastian wakes up, realizes that his ankles are tied together, and he's hanging upside down while bleeding. It also appears near the end of The Consequence. At first it appears as it's real life counterpart, before Juli reveals Ruvik's view of it.
This room is based on how Ruvik sees the real life counterpart in Beacon Mental Hospital. In real life it was a planning and experimenting area for Ruvik. It's STEM counterpart is much more bloody and gruesome.