The Phantom Lounge is a special area located in Freddy Fazbear's Pizza where all the phantom animatronics reside.
The Phantom Lounge had a minor role in this video, but it also shows where the animatronics go to have their leisure time and to hang out. Animatronic Mario was able to get into the back door by distracting Puppet because he threw something at his table and he had a tantrum.
Then after sneaking into the back of the room and opening the back door, he found William Afton, took his clothes off, and threw infinite "lotsa spaghetti" at him. William escaped into a pipe which led to Fredbear & Friends Spaghettria, and found Luigi, but all he said was "What's up?", and then Animatronic Mario fell out of the pipe on then fell on William.
Then he ran away from them both and found Springtrap, who had injured his knee earlier and was still complaining about it, so he shut him down and got into him. But a malfunction occurred and killed William. His last words were: "I am ded, not big surprise." At 6 AM, Animatronic Mario blew the door off with sticks of dynamite, then Animatronic Mario and Luigi left the place, not noticing that Fredbear & Friends Spaghettria was entirely on fire. Also, the fate of the Phantom Lounge is unknown.
The Phantom Lounge is located somewhere near Freddy's Spaghettiria and this location is where all the phantom animatronics stay for their leisure time, (also including Golden Freddy, Puppet, Mangle and Animatronic Mario.) The boss of the Phantom Lounge is William Afton, who works in the back of the lounge.
Whenever an animatronic is needed, a notification pops up that shows a pixelated picture of a Freddy Fazbear head (or mask), and some text that reads "Animatronic needed!" So whenever that notification pops up, it is that animatronic's responsibility to scare whoever is working at the spaghettria.