So what is Scandelous State, even?
You cna talk to the guards when their icon is pink to get lured to the smoking guard instead of your room, but it looks like it's just the regular beat them or lose and be raped scene.
I hvn't seen anything about her getting stripped or running around at night.
That has nothing to do with the Scandelous State. I think that is just a high guard aggresion thing that got added.
Anyways, the Scandalous State is once Karryn has enough exhibitionism related passives she starts to fix her clothes between battle less and less. Once you have enough of them and get stripped in battle afterwards you don't dress up all the way and she exposes her breasts and pussy. This turns her on and she starts making sexy posses.
In this state you can find inmates/guards in places you normally don't see them and can get into an encounter with them. Some edicts increase the amount of people who wander around at night. Mostly the sell curfew passes one, and volunteer prisoner guards for Karryn's room.
A note about this state, you are locked out of various areas, such as the bar, visitation, the canteen, and the shop. So you can't start any of the mini games there, or interact with the chef/shop keep NPC for certain buffs.