Michael is in a long term relationship with the doctor, and having an affair with young, sex-crazed Shay. (STTNG lore seldom touches on marriage and sometimes even implies there is no strict monogamy) Shay brings back a recreational drug (some kind of super MDMA/viagra hybrid) from a trader on the planet's surface. When the doctor checks it in quarantine, because she knows about the "little tramp" sleeping with Michael, she switches it with an illegal contraband shrinking pill she confiscated from another crewman. She sets up a ship-computer medical trigger to tell her when the pill is injested, planning to catch them in the act, embarass them, and at least keep her in sick-bay and away from Michael for a little while.
According to plan, Shay and Michael get together to use the pills, setting off the medical alert trigger when Michael takes one. The doctor heads to their location to "catch them in the act" under the guise of "correcting her horrible accident switching the pills".
However, only Michael took the pill, surprising he and Shay when he shrinks. Shay assumes the trader sold her the wrong stuff. She asks the computer to confirm he's in no danger, a request he interrupts because the doctor will know about the medical scan. Instead he phrases a sequence of non-medical questions about how this could have happened, to hide it from the doctor. Once they realize he's safe, and there is a medical remedy, Shay laughs, finding the situation both funny, and a big turn on.
However, when she shows up at Shay's to "correct her horrible mistake switching the pills", Shay is completely normal. She