I'm going to summarize, since there's a lot of partial answers.
The scene in question is a reference to a convo with Nick back in Episode 4, where he says Vinny's room has been used for fucking and pissing since he left the DIKs. When the scene is triggered (again, just keep moving around your bedroom throughout the various areas and it'll trigger easily), the drunk sheriff wanders in because he remembered that he used to piss in the ruined library.
The scene can only be activated
before talking to Sage, because while she's talking, you can see the guy peeing into a beer bottle and MC confronting him.
This all culminates in the costume contest, where the obnoxious fireman who cheers for Kylie/Bella to win accidentally drinks the piss and immediately pukes.
It's such a great gag, and very easy to miss, to the point that most people probably think the guy puked just because he's drunk.