Some "gonzo" role-playing game products are lots of fun to read as a potential referee. Written especially for GMs, they are just begging to be used in play by presenting all kinds of bizarre places and creatures and objects, but when it comes to actual play, the players don't have nearly as much fun.
I think that some varieties of "gonzo" play-styles and aesthetics have the potential to block player fun as much as they can stimulate a sense of weird wonder.
When a setting is strongly detached from reality, and becomes quite unpredictable, players cannot judge the outcomes of their choices. If you drink from a pool in a subterranean chamber, you might have to save versus poison or die, or you might raise a prime attribute. If there's no way for the players to figure out if something is beneficial or harmful, no clues, then the fun house ceases to be fun. Player choice becomes less meaningful when the effects of actions are not predictable in any way. A weird or psychedelic world may make sense to the GM, but if it seems to players that anything can happen, the game can cease to engage. The GM takes delight, but the players are just experimental guinea pigs wandering in the GM's world.
Combine that with the side-effect that the "gonzo" aesthetic can emphasize the gap between player and character, by appealing to the sense of humor of the player, not the character, it increases the "gamey-ness" of a role-playing game, but it's a game in which there is little fictional rationale for players to make decisions that matter.
In this way, unpredictable gonzo settings can be like the games in which GMs have a cast of powerful NPCs and an ongoing drama of their own, where the players are just witnesses to the cool stuff that the NPCs get to do. Players and their characters matter less.
From the beginning of the dungeon-delving hobby, traps have been an essential feature. Ingenious GMs dreamed up all kinds of wicked traps. I still have some of the book series Grimtooth's Traps (from 1981) by Flying Buffalo, the producers of Tunnels & Trolls, a game that always remained more "gonzo" in its presentation than early D&D.
The Grimtooth's Traps books are compendia of sadistic and unpredictable traps to foil dungeon adventurers. You can hear the GM cackling, "Gotcha!" Most of them are confusing to players and likely to maim and kill PCs without warning. It's not clear that anybody would actually put them to use in play, but somebody must have done it.