Batman is under the Scarecrow's control! But how'd this happen? Well, when Bruce and Ivy started fighting off the fear gas influenced Catwoman, Batgirl, and all them, they started to win, so Scarecrow decided to threaten their lives in exchange for Bruce standing down. Bruce agrees, and Scarecrow dosed him with the new toxin... that Bruce already vaccinated himself against, but plays along with Scarecrow and "turns" on Ivy.
Bruce's plan is to go along with Scarecrow's allies to see just what they're doing, so he pretends to cooperate with Pyg and Merrymaker, while they go out in the city to collect "fear" while Gotham sleeps. Pyg and Merrymaker lead Batman to an apartment complex where they intend strike, but Bruce leads them to a different set of apartments, where he actively takes part in dosing innocents with fear toxin, which he feels bad about... but we learn later that he lead Pyg and Merrymaker to life long criminals he's never been able to put away, who now will have nightmares about Batman every night, so oh well?
In working with Scarecrow's allies for the night, Bruce learns that Scarecrow is extracting a pure form of fear from his victims, and using to create a stronger fear toxin, which he has plans to spread all over the place, outside of Gotham. But since Bruce has never been under the influence this whole time, he also slips the antidote into the toxin that is loaded on to blimps, sent for distribution. So it's only a matter of time before... well, the blimps blow up for some reason, and everyone snaps out the Gothtopia haze? So that manes he likes of Batgirl, Catwoman and Batwoman also snap out of it, and they all take out Scarecrow and his allies fairly quickly.
So with Scarecrow defeated, he gets taken in by the GCPD, but not before escaping the cuffs he's put in and impaling Batman... this of course is him being dosed with his own contentment serum, and in his form of Gothtopia, he kills Batman. In reality, Scarecrow is just going crazy in his cell, as Batman, Gordon and Jeremiah Arkham watch on. Before Bruce leaves, he makes sure to tell Gordon and Arkham that the effect won't be permanent, and Scarecrow will eventually come back to his senses and realize where he is, which is their sign to keep a close eye on him.
In a short epilogue, Catwoman finds Batman and discusses with him the fragments of what she remembers. It's not much, but she remembers them being more than just partners, and being happy... but TOO BAD! BATMAN DON'T PLAY THAT GAME! SHIT WAS FAKE, AND BATMAN GOT BATMAN STUFF TO DO!