I think Vanjie was on the bottom for story and so Michelle could clock her similar looks, more so than the challenge performance. These sorts of challenges are useful for production because they can judge them on arbitrary shit like whether or not they were giving the 'essence' of the character, so it's pretty much free story placements. What the fuck is the essence of Rosie O'Donnell anyway.
That said, I think Yvie would've won had next episode not been the monster ball that she's pretty much confirmed to blitz. Having 3 challenge wins by episode 5 would make it really jarring if she were to get eliminated, or make the winner obvious halfway through the season, lol.
I have really mixed feelings about this challenge though. The content itself was incredibly cringy, but I don't think any of the queens did poorly at all. Of course some blended, but the writers of the challenges aren't good enough to give everyone an opportunity to truly shine (see: Diana in baddest bitches in herstory). It was Mercedes time to go though, but I feel like she left on a high note in comparison to the rest of her run.