It resembles a real dungeon. However, it also has an interrogation room. Jorgen Von Strangle detain them because they grant Timmy's wish, which was to allow kids can rule the world, earlier in the episode. According to Da Rules, fairies can only be assigned to children in need and in his musical Pull Back the Fairies, according to the title itself, he pulled back the fairies because the kids now rule the world. This is also where Cosmo and Wanda sang their love song, Floating With You to distract Jorgen for them to escape and help Timmy foil the evil plan of the Pixies.
This is one of the two known dungeons in Fairy World. It only appears in School's Out: the Musical (it was probably renovated or replaced by Abracatraz in between Season 4 and Season 7) as it has never appeared since.