Guenever is in the Queen's chamber at the Carlisle Court. It is winter, cold and lonely. The King is away in France with the Army, laying siege to Lancelot. She talks with her lady Agnes about the King's sense of justice and Gawaine's grief that drives him to pursue Lancelot. Agnes talks about Mordred, about how he scares her and she does not trust him now that he has been named Lord Protector of the realm. Agnes says he is always watching—he could even be listening now!
Despite everything that has happened to her, and the fact that her husband is laying siege to her lover, Guenever is extremely calm and understanding. She recognizes Arthur's need to see justice done and even justifies Gawaine's maddening grief. In this, White shows us a matured Guenever—one who accepts the events around her and see the justice.
Guenever drops her needle; she fears Agnes is right and bid her open the door. Agnes does so and swings back the door to reveal Mordred's glittering face. Anybody who had not seen Mordred for a month or two would know that he had gone mad—but Guenever, seeing the slow disintegration of his mind daily, has not noticed.
It is useful to draw comparisons between Mordred and some of the early 20th century dictators who drove WWII—it is unlikely White was writing Mordred as any specific one, but the presentation of a mad, yet intelligent leader who can motivate hundreds of people to fight for his cause is poignant.
The two talk; Mordred with a series of veiled threats that Guenever counters with plain aggression. He tries to call her by her pet name "Jenny." Mordred, in his sly manner, tells her that he is going to make an announcement: that Arthur has been killed in battle (although he has not) and then crown himself king. Then, to finish off the beautiful symmetry of history, he will marry Guenever. Guenever suddenly recognizes how powerless she is.
We see now how truly mad Mordred is—he must know that Arthur will not let this happen and will come back to reclaim his throne. His ideas are no longer logical but simply perverse and wicked—his personal desire for revenge is now stepping out from behind the mask of the larger false reason that Agravaine had suggested he erect.