The scene was always intended to be set in the B/C deck area below the Bridge, but they just didn’t have the time/money to realize the set and FX, so they threw together the set with leftover elements from the Rec Deck set. Later sources, such as MR. SCOTT’S GUIDE TO THE ENTERPRISE, justified this by saying that the characters were sitting in a private room within the lounge, and that the “windows” were actually viewscreens.
The 2001 Director’s Edition took the approach of showing that they were indeed windows, and, based on the angle of the CG nacelle added to the scene (an angle chosen the because the shape of the set’s windows are a match ONLY with the square Rec Deck windows on the FX miniature of the ship), that the lounge was located on the upper level of the Rec Deck, which doesn’t work.
The Rec Deck set featured a scenic backdrop painting of the drydock and the nacelles, similar to the angle seen in the 2001 Director’s Editon, but there’s no way the lounge could also be located there, since we can very clearly see that it’s just a balcony in front of the windows.
The Rec Deck painted backdrop, showing the port nacelle:
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Screencap from the film, showing the windows and the barely-glimpsed starboard nacelle on the backdrop:
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The Officers’ Lounge as seen in the theatrical cut:
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The Officers’ Lounge as seen in the 2001 Director’s Edition, which was essentially a lower-budget version of the Rec Deck and its view out the windows:
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