Unusually, there's no alcohol at the opening of Stuart Ringholt's Kraft at MUMA. Instead, a Saturday crowd treats itself to ginger ale, elderflower cordial and Virgin Bloody Marys. The lack of libations isn't the only thing unusual about this opening. On top of the regular chatter, everyone is talking about whether or not they will be getting naked for one of the works, Club Purple.

One of two new commissions Ringholt completed for this survey of his practice, Club Purple is a fully functioning replica of a nightclub, built inside the museum, at the end of a poster-covered plywood corridor. Inside, there's a disco ball, coloured lights and a touchscreen panel for selecting songs. Anyone up for a dance has to abide by a specific set of rules. One rule says that no one affected by alcohol may enter – hence the lack of drinks at the bar. Another, more glaring rule is that all personal property must be removed. That personal property, the rule spells out, includes clothing.

Ringholt’s body of work is often autobiographical and he admits that there's a hint of personal history in Club Purple.

"I used to go to a club in Fremantle called Club Zorba," he says. "They had drinks there but no-one really drank, it was just about dancing."

That was 20 years ago, shortly after the events Ringholt documented in his memoir Hashish Psychosis: What it's like to be mentally ill and recover. Back then, a manic and delusional Ringholt was in hospital after lapsing into psychosis – the result of drug overindulgence while travelling through India. Club Zorba, along with yoga, was part of the recovery process.

As such, Club Purple aims to be a liberating, almost healing experience to some extent. “It's really an opportunity for people to just dance, to feel their whole body, to get the clothes off,” he explains. “You can feel air on all your body, air on your ribs. It's electrifying.”

But Ringholt, who is also well known for conducting a series of gallery tours in which both he and his tour group were entirely nude, shies away from a reading of Club Purple as a didactic work about the healing qualities of naturism.

For similar reasons he says he won’t be doing any more workshops, such as his anger workshop, for which he borrowed elements of self-help seminars to encourage participants to deal with negative feelings. The fact that, for once, Ringholt isn't leading his participatory work, or even participating, in it is telling. "It's quite fitting that I'm not in there [for Club Purple]. It's not a preachy work. Running the workshops could be labelled as quite preachy of me,” he says, “because there's a pedagogical function in the work to teach people about anger.”

As open-ended as the participatory work may be, Club Purple operates on a strictly formal level as well. As Ringholt puts it, the idea is "to split the museum in half and also to split the audience". That split is immediately noticeable at the opening. A large queue has formed outside Club Purple. Others steer around what is essentially for them a negative space within the museum, looking instead at the collages, drawings, sculptures and video works that make up the exhibition. Hanging over both, though, is a challenge they've accepted or rejected. Everyone is in some way involved.

As the opening draws to a close and people spill out onto the Ian Potter Sculpture Court, the conversation continues. One woman is gushing about the Club Purple experience, waving her arms in an attempt to describe it before throwing her hands up, defeated, saying, "it was liberating." An older man, when asked why he didn't participate, laughs. "I don't think they'll allow anyone over 50 in. Well, they shouldn't".

No matter the specifics of what they're saying, everyone is essentially speaking about their fears and their boundaries. Instead of the usual cerebral conversations that happen in museums, people, however obliquely, are also talking about their bodies and their feelings towards them.

For a work that takes place in a small room in a corner of a museum, Club Purple has surprising reach. Even hearing about the proposition and making a decision not to go means you've engaged with the work in some way. Outside the museum and outside the crowd, the split is still there.

Which goes some way towards explaining what Ringholt meant when he described Club Purple in passing as a "sonic work" at heart. For the participants, it's about listening to the music and responding to it through dance. For non-participants, the conversation is already taking place – both externally and internally. All you need to do is listen.

Kraft shows at the Monash University Museum of Art until April 17. Bookings for the Club Purple nude nightclub can be made at MUMA, by phone 9905 4217 or online.