I've not even played the game yet and this is already my favorite rendition of Alice in Wonderland.

What just happened? Is this from the game?

Well, this is McGee's version, which is quite a bit darker than the sugar-coated version we've all heard of.

Played it for a while though i don't immediately recall this scene. It would have to be after the rabbit gets stepped on and killed though, as he's not in the pic and it seems she's at some kind of castle.