When it's learned that Sophia has moved into Shady Pines the characters remark that they thought it burnt down and then assume that it must of been rebuilt. However, during The Golden Girls we learn that Shady Pines was quickly repaired after the fire that caused Sophia to move in with the girls. During that shows seven year run Sophia goes their to visit friends plus she and Dorothy compete in the Shady Pines mother and daughter beauty pageant. Thus the characters should know this.
A major point of comedy on The Golden Girls was Sophia's constant maligning of Shady Pines. In reality, however, it was established by Dorothy, Blanche, and even Sophia that Shady Pines in reality was a top notch retirement home. However, in this episode it seems as if Dorothy is horrified to learn Sophia has gone back to live their seemingly confirming to everyone that Sophia's horror stories about the place were indeed correct. This is a major error on the part of the writers between the two series.
When Dorothy learn that Sophia moved into Shady Pines she admits that Sophia's horror stories about the home were true. However, on The Golden Girls a recurring gag would be Sophia's embellished stories about Shady Pines and Dorothy's upset reaction as she tells Sophia that she knows how good of a place it was. Even Sophia admitted several times that Shady Pines was a great nursing home most notably in the episode when her friend Lillian gets moved from Shady Pines to the substandard Sunny Pastures home.