I actually saw that film.
Ilsa conducts sadistic scientific experiments designed to demonstrate that women are more capable of enduring pain than men are, and therefore should be allowed to fight in the army. Ilsa is also portrayed as having a voracious sexual appetite for her male prisoners, whom she then castrates and kills.
It plays with the tropes of male anxiety of sexual inadequacy and the fear of castration.
Her character was very loosely based on that of Ilse Koch.