i think its like anyone who sees their reflection in the pool has their mind pulled in, and then it basically acts like an acid pool slowly dissolving whoevers trapped in while blocking their way out and mental attack with her own suffering
It's probably more than that. Kugai appears to be the culmination of her entire life of suffering as an unwilling high-class prostitute in the red light district. The full realization that despite her high status, she's still at the end a sexual slave.
Oiran was a beautiful girl loved by her parents, who presumably sold herself to prostitution to save her family. She worked hard and dutifully in her role as a prostitute, rising in rank all the way to Oiran, and was on the cusp of escaping that life.
But she was betrayed, poisoned, and died by the very person she trusted. It was then that she knew. She realized that despite the love for her family, the effort to work as a sexual slave, the will, the strength, even the kindness she gave to those like her, are meaningless.
She gave her all, her everything, and how was she repayed? She was used, abused, wrung dry and discarded like soiled clothes without thought, without help, and replaced by the arrogant, deluded sexual slave that she tried to help. It was then that she knew:
Life is a reflection of Hell, and it is a prison you can never escape. That is her epiphany, her revelation. And that is her curse.
Your soul is dragged into a pool of distilled despair, forced to watch from a prison forced upon you and powered by your own life, as both your body and your soul is simultaneously drained and wrung dry of your very life. All the while literally drowning in a sea of the Oiran's despair and hatred.
It might have had even more effects, but sadly for the Oiran Taisai Seikun is a god who's symbol is Jupiter. A prison of despair does not fare well when blasted by the force of a distilled spiral galaxy